Mastek - Bombay Stock Exchange · lives through mission critical and enterprise digital transformation (DX) solutions. With over three decades of experience and a comprehensive bouquet

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Mastek Limited, /1106/ 107, SDF-IV, Seepz, Andheri (E), Mumbai· -100 096, India.

Tel +91 22 6695 2222 / 6722 4200 Fax +91 22 6695 1331 www.mastek.com Mastek

Date: July 19, 2018

Listing Department BSE Limited 25th Floor, PhirozeJeejeebhoy Towers Dalal Street, Fart Mumbai-400 001 Tel No. 022- 22723121 Fax No. 022- 22721919 STOCK CODE: 523704

Dear Sir(s)/Ma'am(s),

Listing Department The National Stock Exchange oflndiaLimited Exchange Plaza, C-1, Block G, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051 Tel No.: 022- 26598100 Fax No. 022-26598120 STOCK CODE: MASTEK

Subject: Submission of approved and adopted Annual Report for the financial year ended March 31, 2018 at the 36th Annual General Meeting (AGM} of the Company -Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as per the provisions of the Companies Act, 2013, please find enclosed the Annual Report for the financial year ended March 31, 2018, duly approved and adopted at the 36th Annual General Meeting held on Thursday, July 19, 2018atH.T. Parekh Auditorium, AMA Complex, A TIRA. Dr. Vikram Sarabhai Marg, Ahmedabad 380015, Gujarat at 11.00 a.m.

Request you to take the above on your records.

Yours faithfully,

For MASTEK LIMITED

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pa y Secretary Encl: - As above

Enterprise Digital Transformation:Inspiring Growth

AnnualReport2017-18

Mastek Limited

Forward-looking Statements:This Annual report contains ‘forward-looking statements’, identified by words like ‘plans’, ‘expects’, ‘will’, ‘anticipates’, ‘believes’, ‘intends’, ‘projects’, ‘estimates’ ‘endeavours’ and so on and are based on our current expectations, assumptions, estimates and projections about the Company, our industry, economic conditions in the markets in which we operate, and certain other matters. All statements that address expectations or projections about the future, but not limited to the Company’s strategy for growth, future operations, margins, market position, profitability, liquidity and capital resources, are forward-looking statements. Since these are based on certain assumptions and expectations of future events, the Company cannot guarantee that these are accurate or will be realised as these statements are subject to known and unknown risks, uncertainties and other factors, which may cause actual results or outcomes to differ materially from those projected in any forward-looking statements. In light of these and other uncertainties, you should not conclude that the results or outcomes referred to in any of the forward-looking statements will be achieved. All forward-looking statements included in this Annual Report are based on information available to us on the date hereof, and we do not undertake to update these forward-looking statements unless required to do so by law. For any further clarification, please contact Mastek Limited.

ContentsCORPORATE OVERVIEW

Enterprise Digital Transformation: Inspiring Growth 01A Journey of Inspiration 02Inspiring Growth - Leveraging Unique Strengths 06Inspiring Growth - Working with Diverse Enterprises 07Managing Director’s Message 08Group CEO’s Message 10Inspiring Growth in FY’18… 12Inspiring Growth - Awards & Accolades 13Inspiring Growth - Seize, Succeed and Soar 14Inspiring Growth of our Global Customers 16A Culture that is Inspiring Growth 18Inspiring Growth with Responsibility 20Board of Directors 22Financial Review 24Financial Highlights 25Corporate Information 26

FINANCIAL STATEMENTS

Standalone Financial Statements 100Consolidated Financial Statements 146

SHAREHOLDER INFORMATION

Frequently Asked Questions (FAQ’s) 193Notice 198Proxy Form

PAN Update/E-Communication Registration Form

MANAGEMENT REVIEW

Management Discussion & Analysis 27Directors’ Report 37Report on Corporate Governance Report 69Beyond Business: Corporate Social Responsibility 95

Enterprise Digital Transformation:Inspiring GrowthThe world is in the midst of a digital transformation. With 75% of businesses set to transform to digital by 2020 (as per Gartner’s projections), the opportunity matrix is expanding and fast.

It is an inspiring moment for us, at Mastek, as we get ready to take on the new opportunities to expand our business across sectors and regions, with a strong focus on improving lives through mission critical and enterprise digital transformation (DX) solutions.

With over three decades of experience and a comprehensive bouquet of solutions and services, we are well placed to partner businesses in their digital transformation journey.

Our excellent track record of delivery, as manifesting in our 96% delivery success ratio, has empowered us with the capability to drive the growth of our diverse clients.

While our expertise across the value chain – from design to development to deployment – makes us the preferred choice for a growing client base, our dedicated team of quality-focussed experts remains committed to always doing right for our customers.

Further facilitating our progression in expanding world of digital is our performance excellence, that continues to strengthen the trust of our customers, as reflected in the repeat business offers. In the last three years, 98% of our annual revenue has accrued from repeat business.

Together, these strengths are Inspiring Growth @ Mastek. And we shall do so as an organisation that is more agile, more responsive to customer needs and takes them through their DX journey.

A Journey ofInspirationIncorporated in 1982, Mastek is engaged in providing software solutions and integration services. In recent years, we have emerged as a leading provider of Enterprise Digital Transformation services for both public and private enterprises.

The past 35 years have seen the Company work closely with marquee global clients in their transformation journeys. Our insightful and empowering solutions have impacted the lives of millions across the world, in diverse sectors ranging from retail, financial services and

Steering our journey of success is our ability to solve problems, deliver and innovate for our clients, who look to us for outcome-focussed solutions.

Digital transformation leaders built to deliver digital vision

Agile consultancy firm

A Digital Commerce Solutions provider specialising in delivering strategies and solutions that drive ROI

Trusted partner for agile-based digital

transformation programs

THE MASTEK GROUP

PORTFOLIO

healthcare to public-sector businesses across the UK, US and India.

We spearhead our global operations from our principal offshore delivery facility based in Mumbai, India. Staying at the forefront of technology, we have made significant investments in creating intellectual property which, along with proven methodologies and processes, as well as well-entrenched onsite and offsite deliveries, helps in generating greater value for our customers.

02 Annual Report 2017-18

Our Certifications

The first and only Indian company accredited with JSP440 for the UK Ministry of Defence

ISO 20000:2011 ITIL certified

Our Offices

U.S. (two centres)

U.K. (three centres)

India (six centres including the headquarters in Mumbai)

03Mastek Limited

01-26 27-98 99-192 193-206Corporate Overview Management Review Financial Statements Shareholder Information

36 yearsExperience in delivering mission-critical enterprise applications

>22kSchool administrative systems

91%Customer advocacy rate

6.5 millionSecure healthcare transactions processed daily

83%Mastekeers hold an engineering degree

c.46%Y-o-Y revenuegrowth in FY 2017-18

#1Supplier of agile development services to UK Government on G-Cloud

2000+Team strength

80%Customer retention rate

96%Program delivery rate v/s industry standard of 81%

5+ yearsAverage customer relationship

Mastek in Numbers

Our Service Offerings

We offer comprehensive services covering the full range of software development process - from an initial agile consulting exercise, to application development, testing and ongoing support as well as maintenance. Our offerings are aligned with our goal of being recognised as a leader in delivering digital transformation services by helping customers understand their challenges, creating a roadmap, and delivering state-of-the-art transformational programs projected towards business outcomes.

Agile Consulting - Enabling our clients to deliver digital change

Business Intelligence and Analytics – Offering pragmatic analytics for business priorities

Application Development – Delivering robust, scalable and secure applications

Application Support & Maintenance – Bridging the business and IT gap

Assurance & Testing – Extending iterative, agile testing approach scaled to business needs

Digital Commerce – Providing Omni channel e-commerce innovation


Vision 2020

Our people, referred to as Mastekeers, are at the core of our inspirational growth agenda and conduct themselves by a set of defined ethical values. These values, called PACTS (Passionate, Accountable, Collaborative, Transparent and Sustainable), are imbued across the organisation, and ensure that no member of the team indulges in outrageous or discriminatory behaviour towards anyone within the organisation.

This value system, which all Mastekeers are required to uphold at all times, is rooted in respect for our heritage. More importantly, however, it serves as the framework for the behaviour of current and future generations of Mastekeers, enabling quicker and better integration of new Mastekeers into our family.

To make Mastek a global leader in Enterprise Digital Transformation

Passionate - We are fired-up about finding novel ways to exceed our customers’ expectations.

Accountable - Mastek 4.0 (our people transformation programme) empowers us to excel and accept individual ownership.

Collaborative - Mutual respect and teamwork enrich our business outcomes with unique perspectives and experiences.

Transparent - Open and honest behaviour is core to earning trust and delivering exceptional results for our stakeholders.

Sustainable - We increase our social dividend, investing as much in our communities as in business improvements.

Core Values

05Mastek Limited


Inspiring GrowthLeveraging Unique StrengthsA deeply-ingrained set of unique strengths propels our journey, as we move proactively towards capturing the digital transformational opportunities around the world. Leveraging these core strengths, we are continuously sharpening our competitive edge to translate it into a compelling advantage for our clients.

Agility - We deploy an incremental agile approach for all projects. By breaking each project into short small tasks, we get the flexibility to review the project at every step, as it evolves. With robust test assurance, quality controls and governance at every stage, we are able to ensure real-time responses to project requirements. This enables us to maintain project quality and timelines.

People excellence - We are proud to be driven by the very talented people in the industry. Recruited from the best universities after a rigorous assessment process, the Mastek team is proficient in meeting project expectations. Our focussed investments in our people help nurture their talent, with regular training programmes to upgrade their skills and capabilities. Our learning and development programmes are aimed at helping our people evolve as competent professionals, equipped with the necessary competencies to keep pace with the transforming market needs and trends.

State-of-the-art back-end - We embrace and employ futuristic technologies for successful digital transformation. Keeping a watch on trends in Blockchain and Internet of Things, we have made investment in these technologies to build our capabilities and serve our customers. Several advanced cloud platforms and micro-service architecture are also used to facilitate successful digital transformation.

Strong client relationship - Our innate ability to understand the challenges of our customers, across sectors, enables us to craft insightful and impactful solutions. We command an outstanding program delivery rate of 96% versus an industry standard of 81%. Our average customer relationship length is five years, and continues to grow. The final validation of our lasting customer relationships and enduring trust is the fact that 98% of our annual revenue is from repeat business.

“The professionalism and dedication of Mastekeers to go the extra mile is what differentiates them from other organisations.”

Nick Cooper, Head of Projects, Morrisons, (U.K.’s leading supermarket chain)

“Mastek adds value to our business. They are a key IT partner, now and in the longer term.”

Simon Carter, IT Director, Together, U.K.


Government Retail Financial Services

Home Office Morrisons Supermarket International Personal Finance

NHS Digital BrandsMart USA Together Financial Services

British Army Information Application Services rue21 Yorkshire Building Society

Inspiring GrowthWorking with Diverse EnterprisesWith our ability to recover troubled/stalled DX projects, modernise legacy environments and create new digital interfaces, we have built long-standing relationships with marquee clients across sectors.

Inspired to Foster Allianceswith Leading Partners

Microsoft

IBM

Oracle

Logi Analytics

Red Hat

Liferay

MapR

Creative Virtual

Talend

Denodo

07Mastek Limited


Managing Director’sMessage

Dear Shareholders,

It is my privilege to present to you the Annual Report of Mastek for the year ended 31 March, 2018. We achieved robust growth in revenue, operating profit and earnings per share, and continue to generate consistent and sustainable value for our shareholders. More importantly, we are successfully executing against the roadmap outlined under our three year plan to become a global leader in enterprise digital transformation.

Businesses across the globe recognise the imperative to leverage new and emerging technologies to drive efficiencies. While in many cases existing legacy business systems are being modernised, yet in other cases,

“We are steadily enhancing our clientele in sectors such as financial services, retail, amongst others and revenue is being generated from multiple service offerings. To help drive future diversification, we have established a new-business sales function in the UK, focussed on driving growth across new sectors.”

new disruptive business models are being embraced to achieve the desired outcomes. In fact, it would be fair to say that almost every corporate company is pursuing digital transformation at some level. As per a recent global study, large organisations are annually spending around USD 400 billion on digital and analytic business transformations. However, according to Forbes, more than 84% of digital transformation projects fail to meet expectations. As businesses struggle to implement digital transformation, at Mastek, with our proven capabilities in delivering large and complex enterprise-wide transformation projects, we are well-placed to successfully partner businesses from end-to-end in their transformational journeys.


The global momentum is also skewed in our favour. Major global economies are poised for sustained recovery in the next couple of years, with the US, a growing market for Mastek, already showing a strong revival in recent times. While in the UK, economic activity is likely to be subdued owing to uncertainty over the outcome of Brexit negotiations, the withdrawal of UK from the European Union offers significant opportunity for Mastek. Over 27 new government departments will be created all requiring digital platforms and an experienced software engineering partner able to deliver mission-critical applications. Having worked with the major central government departments in the UK, our experience and expertise will place us at a vantage point for new contracts. Further, there’s already a shortage of approximately 69,000 engineers a year in the UK which will be exacerbated by Brexit. With our strong talent pool of highly qualified and experienced software engineers, we are ready to help plug that gap.

John Owen, our Group CEO, came on board in November, 2016. The past financial year has been the first full year of performance under John’s able leadership. He has strengthened the executive team and inspired the organisation to reach higher, under his “Vision 2020” agenda. The consistent growth and predictability that he and his team have delivered bear testimony to the quality of vision and leadership that John has brought to Mastek.

While the UK and the US continue to be our key geographies, our business model is well-diversified and de-risked. In these markets, the revenue from government projects is spread across many programs and we have been successfully winning new deals inside those accounts. We are steadily enhancing our clientele in sectors such as financial services, retail, amongst others and revenue is being generated from multiple service offerings.

Vision 2020 articulates our ambition to be a global leader in digital transformation services. We have been steadfast in our pursuit of this vision. Innovating, developing bespoke solutions and serving clients in a rapidly changing marketplace have enabled us to reposition Mastek from a commodity Indian-offshore IT services to a high-value impact and trusted digital transformation partner. On the financial front, we continue to move towards our target of returning to industry benchmarks and providing financial stability and sustainable growth. In a similar vein, on the operational front, we simplified our operating

model and aligned all resources to a common shared plan. Our people have been the most important catalyst in enabling us to provide a compelling value proposition. During the year, we remained focussed on ensuring a high-performance culture while protecting our core values and purpose.

The Company paid an interim dividend totalling to 40% (` 2.00 per share) for FY18. The Board of Directors have recommended a final dividend of 80%, which illustrates our confidence in the long-term prospects for the business and its underlying strength. The total dividend for the year including interim dividend works out to 120% (` 6.00 per share).

I would also like to emphasise the Board’s commitment to upholding the highest standards of corporate governance. Since our inception, adhering to high ethical standards have been part of our culture - starting at the top and permeating every level of the organisation. Passionate about the business while staying true to integrity and transparency, your Board remains committed to creating shared value.

At Mastek, we also understand the importance of promoting business sustainability. Reducing our water usage, energy consumption, food wastage and e-waste are among the small but measurable steps we have undertaken, giving testament to our culture of making a difference in our world.

This is an exciting time of opportunity for the Company. Guided by our strategy, capabilities and financial strength, we remain confident of delivering higher growth and expanded profitability. On behalf of the Board, I thank our clients, partners and shareholders for their trust and support. I would also like to extend the deepest appreciation to our employees who consistently demonstrate their hard work and dedication to Mastek’s success. Mastek is an excellent Company with a bright future, and we firmly believe that the best is in the offing.

Sudhakar RamVice Chairman & Managing Director

09Mastek Limited


Group CEO’sMessage

Dear Shareholders,

It gives me immense pleasure to report that the FY 2017-18 was a commendable one for Mastek. In our first full year of operations towards the realisation of our Vision 2020: to be a global leader in enterprise digital transformation, we delivered a strong, balanced and sustainable performance across all aspects of our business. Vision 2020 provides cohesion, consistency and focus, enabling us to successfully compete against much larger competitors who operate in our space.

Digital is described by the World Economic Forum (WEF) as the 4th industrial revolution and is driving structural change in every company, industry and even our country. With billions of people connected to mobile devices and having unprecedented access to knowledge and information, consumer and citizen expectations continue to increase exponentially. Traditional business models are being challenged daily and will remain under constant pressure to transform into the digitally integrated enterprises, whilst retaining the traditional metrics of quality, security and cost competitiveness. Clients that need assured business outcomes to remain competitive and relevant are now increasingly looking towards companies like Mastek to support them on their digital journeys because we help them successfully bridge from the static traditional IT world to the dynamic digital era.

Our reputation for engineering excellence, our delivery track-record and our ability to drive innovation has seen us continue

to grow and lead in the enterprise digital transformation marketplace. We are admired by our clients for our program delivery rate which surpasses industry standards, evidenced by the fact that 98% of our annual revenue over the last three years has been from repeat business. As we reposition the Company with the goal of becoming a leader in Enterprise Digital Transformation, we are confident that our value proposition holds us in good stead.

While there is much more work to do, our accomplishments in FY18 should serve as an excellent source of inspiration for all Mastekeers and all our stakeholders. We secured 42 new clients during the financial year. As part of our Vision 2020 strategy, we also invested in improving our account management capabilities to increase the influence and value we offer to our customers. This has yielded strong growth and improved customer satisfaction. We continue to embed customer-centricity to build client relationships that will transform into mutually beneficial enduring relationships.

Our financial performance has been robust as well, which serves as a testament to the success of our strategy being pursued. Total consolidated income was recorded at ` 838.2 Crores for FY18 as compared to ` 572.8 Crores in FY17, reflecting an increase of 46.3% in rupee terms. Operating revenue stood at ` 817.2 Crores for FY18 as compared to ` 560.2 Crores in FY17, indicating an increase of 45.9% in rupee terms. EBITDA stood at ` 120.7 Crores (14.4% of total income) for FY18 as compared to ̀ 61.2 Crores (10.7% of total

“Our financial performance has been robust as well, which serves as a testament to the success of our strategy being pursued. Total income was recorded at ` 838.2 Crores for FY18 as compared to ` 572.8 Crores in FY17, reflecting an increase of 46.3% in rupee terms. Operating revenue stood at ` 817.2 Crores for FY18 as compared to ` 560.2 Crores in FY17, indicating an increase of 45.9% in rupee terms.”


income) in FY17, demonstrating a healthy growth of 97.3% on Y-o-Y basis.

We ended the year with a 12-month order backlog of ` 524.8 Crores (£ 56.9 mn) as on 31 March, 2018, as compared to ` 333.3 Crores (£ 41.2 mn) as on 31 March, 2017, reflecting an increase of 57.5% that demonstrates we are building positive momentum.

Driven by our robust financial results and the continued confidence in the long-term future of our business, the Board of Directors have recommended a final dividend of 80%. The total dividend for the year including interim dividend works out to 120% (` 6 per share on ` 5 Face Value).

Our quest for excellence is holistic and includes the crucial elements of Corporate Social Responsibility, Business Ethics and Sustainable Management. In this context, Mastek has always strived to do business in the right way and we therefore, welcome the recommendations made by the Kotak Committee to Securities and Exchange Board of India (SEBI). Many of these suggestions promise to improve the levels of transparency, accountability and the overall corporate governance standards in listed companies in India and bolster investor confidence. We are proud of our governance track record and will endeavour to never become complacent about our responsibilities as a Public company. We also strive to align our Sustainability initiatives to the 17 Sustainable Development Goals (SDGs) of the United Nations. Responsible growth is essential to us, and we will continue to implement global best practices in corporate governance and environmental protection.

Like many professional service companies, Mastek is a true reflection of the quality, dedication and professionalism of its people. We increased our Mastekeer population by 31% year-on-year and ended FY18 at 2,058 people who all share our passion, values and ambition to make Mastek a digital partner for our customers. I take this opportunity to formally acknowledge and thank every Mastekeer for bringing our values to life and integrating them into our operations, as manifested in our high level of customer-centricity and engagement approach.

Our business model is supported by our commitment to invest in our people, who are pivotal to delivering on our Vision 2020. We continue to embed leading employee management principles and practices. Unleashing the real potential of our people through continuous personal and professional development on the latest technologies and soft skills, our people transformation program Mastek 4.0 remains unique to our industry. Empowering our employees, Mastek 4.0 unlocks another level of engagement and ownership which allows Mastekeers to serve our customers better than traditional management techniques.

Our customers also understand that to bring innovative digital services to market they will need to invest in building a new type of relationship with their vendors based on trust, collaboration and transparency. This aligns very well with Mastek’s value set of PACTS (Passionate, Accountable, Collaborative, Transparent and Sustainable) and further strengthens our proposition as a trusted partner. Hopefully, this also provides our customers a clear expectation and confidence of how Mastek will perform on their behalf.

Over 36 years, many professionals have built this Company, which is consistently respected by our customers, shareholders and Mastekeers for doing business in the right way. The positive feedback and appreciation I receive whenever I meet any of our key stakeholders fills my heart with pride. Mastekeers recognise that we are only as strong as our last delivery and I assure every key stakeholder: we are and will remain focussed on delivering sustainable and enduring value 24/7. While we are rightly proud of our heritage, we are more excited and focussed on our future as a leader in Enterprise Digital Transformation. Personally, leading Mastek is a huge honour, and our focus remains on building an even stronger and better organisation.

To conclude, we have proved our capabilities in delivering large and complex enterprise-wide digital transformation projects to the public and private sector in our target markets of the UK and US. We continue to deepen our presence in these targeted geographies and do not see any business benefit in geographic market expansion at this stage of our development. Going forward, the demand environment for digital transformation remains robust in both these regions. In India, we will continue to pursue selective bidding, staying focussed on profitable projects and those that offer the prospects of long-term client relationship. With immense opportunity identified across our domain and our detailed strategy of Vision 2020 in place to unlock it, we are confident of exploiting the opportunities and remaining relevant in an ever- changing digital milieu. Our strong performance in FY18 provides us with a reinforced sense of purpose and platform to further scale our business. We intend to build on our achievements and with your continued pride, support, enthusiasm and encouragement we will continue to build Mastek into a stronger company and deliver on our true potential.

Thank you for your investment and trust in our Company.

John OwenGroup CEO

11Mastek Limited


Inspiring Growthin FY’18…

Government projects:

Mastek has won two prestigious projects with the British Army Information Application Services (IAS), thus reaffirming our leading position in government

projects. These include a project to support and enhance the Army Data Warehouse (ADW), and the delivery of secure Application Support Services.

Employees:

As on 31 March, 2018, our employee count stood at 2,058, of which 1,327 employees were based offshore in India, while the rest were at various onsite locations. The

Y-o-Y increase of 31% in headcount reflects the substantialgrowth in existing accounts, new client wins and onsitebusiness demand that required rotating offshore teammembers onsite, thus leading to offshore opportunitiesthat had to be backfilled.Projects in financial services:

One of the leading European International Financial Institution has awarded Mastek a three-year contract to deliver a new data platform. The customer is a

global development investment bank that uses investment as a tool to build market economies in developing and emerging countries.

Aligning ourselves to the burgeoning opportunity matrix in the world of digital transformation, we achieved many significant milestones during the year under review, across the operational and financial spectrum of our business.

New accounts billed during the quarter:

Our focussed sales and business development strategy translated into significant addition to our client portfolio during the year. We added 42 clients in

FY18, taking our total client count to 170 (LTM), as of 31 March, 2018. The top 5 clients accounted for 39.8% of our total revenues, while the top 10 contributed 55.9% of our total revenues for the year.

Growing Orders in hand:

Our 12 months order backlog, as on 31 March, 2018, stood at ` 524.8 Crores (£ 56.9 mn), against ` 333.3 Crores (£ 41.2 mn) as on 31 March, 2017,

reflecting an increase of 57.5% in rupee terms.

Dividend:

At their meeting held on 18 April, 2018, the Board of Directors recommended a final dividend of 80% (` 4 per share). The total dividend for the year including interim

dividend works out to 120% (` 6 per share).

Cash Balance:

The total cash, cash equivalents and fair value of Mutual Funds stood at ` 205.7 Crores as on 31 March, 2018, as compared to ` 153.0 Crores at the end

of 31 March, 2017.


Inspiring GrowthAwards & AccoladesWe are delighted and extremely proud to have won several prestigious awards during the year. It has also inspired us to raise our aspirations, challenge ourselves and grow further.

European Testing Award 2017 - FinalistMastek developed, tested and maintained a highly configurable D2C platform for digital and accurate in-user experience at SEI UK. Increased the automation testing scope from specific applications to cover end-to-end testing across multiple applications.

UK IT Industry Award 2017The Home Office Immigration Technology Programme won the prestigious ‘Best Use of Cloud Services’ award at the UK IT Awards 2017. This is a project that Mastek has been involved in delivering since its inception in 2013. Mastek joined the IPT leadership team and UK’s leading technology companies and professionals at London’s Battersea Park for the UK IT Industry Awards 2017. The award focusses on project teams that achieve exceptional results through outstanding project implementation.

13Mastek Limited


Inspiring GrowthSeize, Succeed and SoarIn the transforming industry milieu, where digitisation is no longer an option but an imperative for growth, Mastek stands out for its distinctive business philosophy and differentiated solutions. Our technological edge, backed by state-of-the-art systems and processes, helps customers keep pace with the rapid proliferation of digitisation, which is currently taking place at the back of new technologies such as mobility, big data, the internet of things, social media and cloud.

The Opportunity Pie

Our growth odyssey is led by the expanding opportunity pie that we see across sectors and geographies. It is our constant endeavour to seize more and more opportunities to scale new heights of success.

The opportunity landscape that is inspiring us to grow in the transforming business environment of today is getting bigger by the day. As per the latest estimates, the opportunity size we are currently looking at is in the range of USD 800 billion.

A recent global study suggests that large organisations spend USD 400 billion annually on digital business transformations. However, an overwhelming 84% fail to achieve the eventual objective, with organisational silos, legacy integration, lack of continuous innovation and the shortage of talent challenging the realisation of their goal.

What enterprises need, and are looking for, are digital transformation specialists with experience and expertise, with knowledge and know-how, and with teams and talent to handhold them as they undertake the digital transformation journey.

19%Projected CAGR of global digital transformation market during 2016 and 2021 (Zion Market Research)

84%Companies failing at digital transformation projects (Forbes)

USD 800 billionSize of the global digital transformation market by 2025 (Grand View Research)

9.4%Estimated rate of growth of global software spending in 2018; software is the fastest growing element of the IT sector


Where we help

Agile solutions for enterprise

We Are Positioned to Succeed…

…And Set to SoarAt Mastek, we are well equipped to fill the gap that businesses around the world face in the realisation of their digital transformation goals. With our powerful nucleus of strengths, we are ideally positioned to partner enterprises in their digital transformation journey.

Our track record of successfully recovering failed digital transformation projects, combined with our capability in delivering credible and focussed outcomes for new projects, places us at a vantage point for harnessing the opportunities. Our experience in delivering large and complex enterprise-wide transformation projects for the public and private sector positions us ideally to collaborate with leading enterprises and become their trusted partner in digital transformation.

With our eyes firmly on the emerging opportunities, and our ability to harness our inherent strengths, we are confident of scaling new frontiers of growth as we move forward. The future beckons us with new and bigger possibilities for expanding our business, and we are all set to soar towards greater heights of success.

1

2

3

RecoverGet a project back on track

ModerniseEvolve your existing applications

CreateEmbark on a new project

“Partnering UK’s Home Office, Mastek successfully delivered flexible and digitally driven IT solutions to support the country’s visas & immigration, enforcement and border forces.”

15Mastek Limited


Inspiring Growthof our Global CustomersOur global customer success stories endorse the success of our business model, which is structured to deliver impactful and holistic solutions, that are aligned to their digital transformation needs. A look at some of these success stories:

Enabling Together’s TransformationTogether, U.K.

Together is a U.K.-based specialist lender, offering short-term finance, secured loans, personal, commercial and buy-to-let mortgages. The Company prides itself on its unwavering commitment to common-sense lending, looking at each case individually and taking a customer’s circumstances into account before identifying a solution.

The Challenge

Together wanted to radically simplify and enhance customer experience while retaining its signature common-sense approach to lending.

Mastek’s Role

Mastek has been partnering Together for the past four years. We started as a 14-member team working on their broking portal, and have since grown into a 100-member team to partner them on more than 125 agile development projects and IT-enabled business

enhancements. With our step by step approach to transformation, we have driven impactful change across Together’s business functions.

Together’s Transformation Journey

Some of the transformation goals we have helped Together achieve through this partnership are:

Replacement of obscure and complex product interfaces with a unified broker portal that is simpler and easier, thus enhancing the processes and value proposition for brokers and customers alike

Addition of decision-in-principle functionality, using sophisticated underwriting logic to give potential customers immediate pre-approval for a specific loan amount. This gives them more information and confidence while applying to a lender

Automation of paper-dependent steps, significantly reducing processing time and enabling faster decisions

Business Benefits

150%growth in loan

book

95%broker satisfaction with the new portal

30%cut in underwriting

turnaround

100%Agile


Helping IPF Achieve TransformationInternational Personal Finance Plc, Europe and Mexico

International Personal Finance Plc (IPF) is a leading provider of home credit and digital loans across Europe and Mexico.

The Challenge

IPF wanted to transform its insurance offering, which was a limited add-on, into a more flexible and attractive portfolio of options. As estimated by IPF, the transformation process could take over a year and cost several million pounds. With this challenge, the search was on for a transformation partner who could build a new insurance product system that was fully integrated with the core legacy system – and do it all at a brisk speed while keeping costs low.

Mastek’s Role

At Mastek, we partnered IPF for meeting the challenges of transformation.

IPF’s KPI Transformation

The transformation objectives that Mastek helped IPF achieve through this partnership are:

We provided a flexible new platform that can, over time, take on the functions of IPF’s legacy system to become IPF’s new single core business system

The new insurance system integrates properly with the old – without complicating future developments or migrations

The new system was developed by us in a fraction of the time and at a fraction of the cost originally estimated by our client

Business Benefits

New insurance system developed

as per business requirements

System developed in just 4 months as against the

estimated one year

Completed in less than 20%

of the baseline development

cost

“Mastek is a good match for us: in company size and flexibility, in their specialist expertise, their responsive service and their professional attitude and behaviour. We challenge them, and they challenge us, which strengthens the partnership and delivers results.”

Steve Thomason, Head of Business Systems, Together

“I was told that Mastek could always be depended on to deliver, and I’ve consistently found that to be true, whether they’re developing a new solution from scratch, extending an existing system, or integrating something built by others.”

Chris Robinson, CIO, IPF

17Mastek Limited


A Culture that isInspiring GrowthAt Mastek, the inspiration to grow finds resonance across the organisational hierarchy, with every member of our team aligned to our vision and goals. Our talented, hard-working and experienced team, which consists of a large number of software engineers, has emerged as a major pillar of our growth strategy. This year, the headcount recorded a steep jump of 31% making Mastek a strong family of 2,058 employees.

We believe in nurturing a spirit of collective ownership and teamwork among our employees, who are imbued with the culture of growth which we have embedded across the organisational framework.

FIXPromotion and PMS process in

alignment with industry trends – both these processes have been adapted

to industry and organisational requirements

GROWLaunch of new-age learning

processes such as ‘Learn Anytime, Anywhere’. (e.g.

providing everyone the flexibility to choose a convenient timeline for learning their desired skills

through the initiative “You Decide Your Learning Calendar”)

BUILDIntroduction of newer

channels through Linkedin and IJ

With people empowerment a key focus area of our HR ethos, we are continuously working towards upgrading and upscaling the capabilities of our employees through regular learning and development programmes. We are progressively moving towards the creation of a ‘fix, build and grow’ model for people development.

In line with the Mastek 4.0 New Age Organisation philosophy, our people are organised as self-managed groups, rather than in a command and control based hierarchical structure.


Upscaling our people capabilities

Capacity-building and skill upgrade programmes like ODI, Denodo, Qlikview & Angular were organised during the year to help Mastekeers stay abreast of market trends. Technical capability-buildin sessions, such as MEAN Stack Angular 4 & MongoDb, DevOps Foundation, Tableau, and Python, also enriched employee learning. Behavioural interventions programmes such as Project Enhance, Mastek Toastmasters Club were held to support the overall professional development of Mastekeers.

Building a positive environment

Our HR thrust on creating safe and enjoyable working conditions, coupled with a robust talent acquisition and management system, has enabled us to earn a high retention rate of 88.88%, making us the preferred choice for talent.

We are equal opportunities providers, ensuring that every employee, irrespective of gender, background and position, has the same scope for growth and progress. As a result, 6% of our employees were promoted to the next role during FY18.

Newer channels of employee recruitment such as Linkedin were leveraged to optimise talent acquisition. At the same time, we continue to maintain focus on Internal Job Posting and job rotation to ensure adequate career opportunities and engender a culture of loyalty and stability for internal employees.

To maintain diversity in the organisation, a special drive for women candidates was conducted, which resulted in higher number of women being on-boarded.

Gratitude is Attitude, International Women’s Day were celebrated with great energy and enthusiasm. Women’s Day was an ongoing celebration for 4 days across locations with workshops on Self Defence and Zumba. The female housekeeping staff was recognised as well for their constant support to the Mastek Family. Gratitude is Attitude event was introduced with the objective of encouraging Mastekeers to live our Mastek values by simply expressing gratitude to each Mastekeer and increase Mastek’s ‘Payroll Giving’ to the Mastek Foundation. This event was held thrice in the last fiscal and as a result the payroll giving enhanced from 48% to 75%.

Boosting employee engagement

To further strengthen our employee connect, our HR team continued to work towards increasing employee involvement and productivity through the year. Significant progress was made in ensuring that more Mastekeers fill their timesheets on time and with accuracy.

Talent pool was the combination of local sourcing in the geography as well as onsite opportunity to many mastekeers, thereby reducing the turnaround time and enhancing the talent pool strength for serving our customers.

Our Performance Management System (PMS) was also re-energised during the year to further strengthen our employee connect. In addition, we enhanced the benefits and support associated with maternity, infertility treatments and congenital diseases to provide employees with a richer experience

The year saw the re-launch of various initiatives that have supported the hiring requirements in the past. Most recently, the Buddy Referral programme was relaunched as StarFinder. Both Linkedin and StarFinder have been instrumental in filling up open positions cost-effectively.

19Mastek Limited


Inspiring GrowthWith ResponsibilityWhile profitable growth is intrinsic to our business strategy, we believe that responsible growth is equally important to drive our success as a global corporate. Led by this belief, we have made sustainability a central agenda of our business model. We have in place a robust framework to promote sustainable growth, and a well-mapped CSR charter to ensure holistic growth for all stakeholders, including customers, employees and the communities around which we operate.

Our Sustainability, Health, and Safety Policy reflects our stringent adherence to social and environmental norms. We review and update the policy every year, in line with the latest industry norms. We strive to align our Sustainability initiatives to the 17 Sustainable Development Goals (SDGs) of the United Nations, and have initiated several measures to achieve the same.

Our certifications endorse our commitment to Sustainability, and during the year:

Our facility at Mahape, Navi Mumbai was certified for the implementation of ISO 14001:2015 in September 2017. The surveillance audit is scheduled in July 2018.

We were certified for the implementation of OHSAS 18001:2007, an internationally recognised standard for Occupational Health and Safety Management System, in September 2017. The surveillance audit is scheduled in July 2018.

We recognise that guidelines and covenants alone cannot bring about the change we wish to see. By integrating sustainability into day-to-day operations, and making it intrinsic to our culture, we are passionately working towards a better, safer and greener future for all. Every small change, we believe, will collectively inspire a better tomorrow.

We endeavour to reduce our Carbon Footprint in every aspect of our operations. Some of the steps taken include:

Reduction in Electrical Power ConsumptionWe were able to reduce our power consumption by 18% over the previous year, through monitoring energy use and

installing LED lights. To further save energy and improve efficiency, we implemented smarter solutions with automated controls to maintain optimal temperature at optimal power consumption. LEDification of our offices as well as replacement of old power guzzler with new smarter solutions has helped to reduce our energy costs as well.

Reduction in Water WastageInstead of serving 500ml of bottled water, we are now using 200ml bottles in a step towards minimising water wastage. Plans have also been formulated for

implementation of rainwater harvesting in the summer of 2018. This will further help us to reduce our water footprint.

Reduce, Reuse and Recycle of E-wasteWe have partnered with companies such as Via Green and Indian Scrap traders for recycling and disposal of E-waste in

an eco-friendly manner. Refilling of cartridges is being carried out to minimise our E-waste.


Reducing EmissionIn December 2017, we organised a free car health check-up camp for Mastek employees to reduce environmental impact. We are working with Mastek COE

team on the carpooling app for Mastekeers. The use of fewer cars by our team will help reduce auto emissions.

Spreading Environmental Awareness

Awareness posters with captions of “use less paper” and “save trees” have been displayed in the washrooms. This will sensitise employees and visitors on the importance of protecting and preserving the earth’s resources.

Record of Food Wastage

We have started maintaining a monthly record of canteen food wastage, and the same is being displayed in our cafeteria for the information of employees. The

awareness will help bring about a positive change in the habits of our people and reduce food wastage.

Exploring Solar Power Energy

We are studying the viability of a solar powered energy / hot water solution for our cafeteria. The initiative is currently in the initial stages.

Our success in reducing food wastage

Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18

400 -

350 -

300 -

250 -

200 -

150 -

100 -

50 -

0 -

Kgs

Month

21Mastek Limited


Board ofDirectors

Mr. S. Sandilya(DIN 00037542) Non-Executive Chairman and Independent Director

Mr. S. Sandilya is a Commerce Graduate from Madras University and holds an MBA from the Indian Institute of Management (IIM), Ahmedabad and he has almost five decades of professional experience. Mr. Sandilya is presently the Non-Executive Chairman of Eicher Group. He joined Eicher Group in 1975 and has held various responsibilities in the areas of Group Finance including Information Technology, Strategic Planning, Manufacturing and General Management. He was the Group Chairman and Chief Executive for six years before becoming a Non-Executive Chairman, the post he continues to hold.

He has been a National Council Member of Confederation of Indian Industries (CII) for many years. He is also the Non-Executive President of SOS Children’s Villages of India, a Non-Profit Organisation providing care for abandoned and vulnerable children.

Mr. Sudhakar Ram(DIN 00101473) Vice Chairman & Managing Director

One of the Co-founder Director of Mastek, Mr. Ram brings to the table extensive experience in strategic initiatives in the areas of Vertical Enterprise Platforms and Applications that enable business transformation.

Mr. Ram, as a veteran of the IT industry, is also a keen observer of domestic and global IT and business trends. He uses his deep insight into the industry to frequently write articles and columns for leading newspapers.

Mr. Ram is a silver medallist from Indian Institute of Management (IIM), Calcutta.

Mr. Ashank Desai(DIN 00017767) Non-Executive Director

Mr. Ashank Desai, is an IT Industrialist and has done B.E. from Mumbai University and had secured the second rank in the University. He holds a M. Tech Degree from the Indian Institute of Technology (IIT), Mumbai. He also holds Post Graduate Diploma in Business Management (PGDBM) from IIM Ahmedabad.

Mr. Desai is the Founder and Former Chairman of Mastek Ltd. He also guides Mastek Foundation, whose mission is to enable “Informed Giving and Responsible Receiving”.

Mr. Desai is widely recognised as an industry veteran and is one of the founder members & Past Chairman of NASSCOM.

He has been felicitated by Prime Minister Shri Narendra Modi for his contribution to NASSCOM & IT Industry. He has been conferred with the “Distinguished Alumnus” Award from IIT Mumbai and the Computer Society of India (CSI) “Fellow of the Society” honour. He has also been presented with the Honourable Contributors Award by ASOCIO - the only Indian to receive this recognition twice. He was conferred with the much-coveted Outstanding Entrepreneur Award at the Asia Pacific Entrepreneurship Awards (APEA) 2010 India.


Ms. Priti Rao(DIN 03352049) Non-Executive and Independent Director

Entrepreneur & Managing Director at Pumpkin Patch Daycare which caters to the needs of young parents, who need a trusted place where they can keep their kids and be able to focus on their careers. India lacks such world-class infrastructure where love, care and safety are the most important aspect. Her focus is to create happy children and help women go back to work. Currently, she has 10 daycare centres in Pune, with 1000+ children under their care. She is also the Chairperson of Aatmaja Foundation.

She holds 25 years of diverse experience in building and delivering range of IT services for customers located across five continents. She has built large remote infrastructure services business using global delivery model. She held senior executive positions with global teams P & L responsibility and large location responsibility for best of breed IT services companies and multinational.

She holds a postgraduate degree in Computer Science from Indian Institute of Technology (IIT), Mumbai.

She won the prestigious “IT woman of the year award” from the Computer Society of India for 2002; and also the “PUNE 2007 SUPER ACHIEVERS AWARDS” in August 2007.

Mr. Atul Kanagat(DIN 06452489) Non-Executive and Independent Director

Mr. Atul Kanagat is a B.Tech in Mechanical Engineering from Indian Institute of Technology (IIT), Mumbai and an MBA from Harvard Business School, Boston, Massachusetts.

After completing his MBA at Harvard in 1982, Mr. Kanagat joined McKinsey & Company in Chicago. He was elected as Partner in 1988, Director in 1994, and thereafter Managing Director of their Seattle office in the period 1995 to 2003.

Mr. Kanagat has been a Member of the Boards of Seattle Symphony, Fred Hutch Cancer Research Centre and Greater Seattle Chamber of Commerce, as also the Board of Liberty Science Centre in Jersey City. Mr. Kanagat has also worked for Harman International as Vice President - Strategy & Mergers & Acquisition.

Mr. Keith Bogg(DIN 07658511) Non-Executive and Independent Director

Mr. Bogg, A-level Economist from University of Hertfordshire, is an experienced London-based Company Director and business change leader operating across multiple functions and sectors with a focus on strategy, restructuring, growth and shareholder value. At Marks and Spencer, he held multiple roles, including Global CIO, Director of Supply Chain and Logistics and Retail Board Director, in addition to the Direct Marketing function. Mr. Bogg has also held senior business change relationship roles with BBC Technology, Catlin Insurance group and as a public and private sector client facing strategic advisor for Gartner. Most recently, he held a Non-Executive Chairman role with Data & Research Services Plc. and currently holds advisory roles with the Civil Aviation Authority and the Grosvenor Group, UK.

Please refer Corporate Governance Section for detailed profile.

23Mastek Limited


FinancialReview

5.6

13.4

28.1

Earnings Per Share (EPS) In `

FY16 FY17 FY18

6.5%

36

10.7%

61

14.4%121

EBITDA Performance ` Crores

EBITDA% of Total Income

FY16 FY17 FY18

2.5%14

5.7%

32

8.3%70

PAT Performance ` Crores

Profit After Tax (PAT)PAT Margin (%)

FY16 FY17 FY18

Revenue by Geography

69%UK

2%Others

29%US

Revenues by Service Lines

3%Assurance & Testing

6%Agile Consulting

8%BI & Analytics

10%Application Support &

Maintenance

47%Application Development

26%Digital Commerce

527 560

817

Revenue from Operations ` Crores

FY16 FY17 FY18

CAGR 24.5%


FinancialHighlights

Particulars 2015-16 2016-17 2017-18

Total Income 54,432 57,276 83,820

Operational Revenue 52,693 56,016 81,721

EBITDA (including Other Income) 3,559 6,116 12,065

EBIT 1,953 4,623 10,189

Net Profit 1,374 3,241 6,996

EPS - Basic (`) 6.02 13.96 29.74

EPS - Diluted (`) 5.62 13.38 28.14

DPS (`) 2.5 3.5 4.5

Annualised growth in

Revenue (%) 1.1% 6.3% 45.9%

Net Profit Margin (%) 2.5% 5.7% 8.3%

EBITDA Margin (%) 6.5% 10.7% 14.4%

Return on Networth (%) 2.6% 6.9% 13.7%

Debt/Equity 0.00 0.14 0.13

Current Ratio 2.6 2.6 2.3

Debtors Turnover (No. of days) 67 55 67

Operating Cashflows 3,150 4,285 6,410

Current Investments and Cash & Bank Balances 11,994 15,299 20,572

Price Earning Multiple 23 13 18

Group Employees as at the year end 1,298 1,577 2,058

Offshore (Numbers) 910 1,045 1,327

Onsite (Numbers) 388 532 731

` in Lakhs

25Mastek Limited


Board of Directors

S. Sandilya - Non-Executive Chairman and Independent Director

Sudhakar Ram - Vice Chairman & Managing Director

Ashank Desai - Non-Executive Director

Atul Kanagat - Non-Executive and Independent Director

Priti Rao - Non-Executive and Independent Director

Keith Bogg - Non-Executive and Independent Director

Audit Committee

S. Sandilya - Chairman

Ashank Desai - Member

Priti Rao - Member

Atul Kanagat - Member

Keith Bogg - Member

Nomination and Remuneration Committee

Atul Kanagat - Chairman

S. Sandilya - Member


Stakeholders’ Relationship Committee

S. Sandilya - Chairman


Atul Kanagat - Member

Sudhakar Ram - Member

Corporate Social Responsibility Committee (CSR)

Priti Rao - Chairperson


Sudhakar Ram - Member

Governance Committee

Ashank Desai - Chairman

Priti Rao - Member

Keith Bogg - Member

Group Chief Financial Officer

Abhishek Singh

Company Secretary

Dinesh Kalani

Auditors

Walker Chandiok & Co. LLP Chartered Accountants (Firm Registration No. 001076N/N500013)

Bankers

ICICI Bank Limited Standard Chartered Bank HDFC Bank Limited

Registered Office

804 / 805, President House, Opp. C N Vidyalaya, Near Ambawadi Circle, Ahmedabad - 380 006 Gujarat, India

Phone: +91-79-2656-4337 Fax: +91-22-6695-1331 E-mail: [email protected]: www.mastek.com

Corporate Office

#106, SDF IV, Seepz, Andheri (East), Mumbai - 400 096, India

Tel: +91-22-6722-4200 Fax: +91-22-6695-1331

Registrar and Share Transfer Agent

Karvy Computershare Private Limited Karvy Selenium Tower-B, Plot Nos. 31 & 32, Financial District, Nanakramguda, Serilingampally Mandal, Hyderabad - 500 032, Telangana

Tel: +91-040-6716-2222, Fax: +91-040-2342-0814 E-mail: [email protected] Free No.: 1800-345-4001

Corporate Identification Number (CIN)

L74140GJ1982PLC005215

CorporateInformation


27Mastek Limited


Management Discussion and Analysis

Overview of Industry and Business Environment

Global Economy & IT

The global economy growth was better than anticipated in CY2017. Global economy grew by 3.7% in CY2017, 0.1% higher than anticipated and 0.5% higher than 2016. The factors that conspired growth to be subdued in the past - a stagnant international trade, slow investment, weak aggregate demand and low commodity prices - are rebounding. Major Global economies are poised for sustained recovery in the next couple of years, with US already showing strong recovery in Q1 CY2018 and expected to continue it forward.

According to OECD (Organisation for Economic Co-operation and Development), the global economy is projected to expand at a steady pace of 3.9% in CY2018 as well as CY2019. The Advanced Economies and Emerging Market & Developing Economies (EMDEs) grew at 2.3% and 4.7% in CY2017 respectively and is projected to accelerate in the next two years. The primary factors to drive global prospects are new tax reductions and increased spending in the United States (USA) aided by record levels of unemployment and additional fiscal stimulus in Germany. However, risk of geopolitical tension, trade war, protectionism, Oil prices and currency volatility still remains a concern over the prospects of recovery.

The US economy grew at 2.3% in CY2017 and is estimated to grow at 2.9% in CY2018. The United Kingdom (UK) economy grew at 1.7% in CY2017 and expected to grow at 1.3% in CY2018 mainly due to weak household spending and the drag on business investment from uncertainty relating to the outcome of the Brexit negotiations. Brexit is festering one of the largest government IT programmes ever to get off the ground. It requires huge changes and a myriad of new systems. According to GlobalData, there are at least 27 core systems across UK government that will need to be reconfigured or rewritten as a result of changes to immigration, borders and customs controls.

In China, growth is projected to slip further to 6.7% in CY2018 and to 6.4% in CY2019 from 6.9% in CY2017 mainly due to less accommodative monetary policy and the Government’s effort to rein in credit and control debt. India continues to reclaim its fastest growing economy tag among developing economies. India GDP grew at 6.6% in FY2017, is expected to strengthen at 7.2% and 7.5% in FY2018 and FY2019 respectively, with strong private investment growth driving the rebound from the transitory effects of demonetisation and the introduction of the Goods and Services Tax (GST).

The global IT spending is expected to be triggered by traditional businesses undergoing through digital transformation. According to Gartner, worldwide IT spending is estimated to be USD 3.7 trillion in CY2018, an increase of 4.5% from CY2017 spending of USD 3.5 trillion. It is forecasted to exceed USD 3.8 trillion by CY2019. The growth is expected to be driven by increased adoption of newer technologies and applications such as Artificial Intelligence (AI), Robotic Process Automation (RPA), Internet of things (IoT), Blockchain etc. The worldwide IT services spending is forecasted to grow at 5.5% in CY2018 and 4.6% in CY2019 aided by increase in clients spend in digital projects and innovation. Enterprise software spending projected to grow at 9.5% in CY2018 and 8.4% in CY2019 to total USD 421 billion.

2017E: Software & services - USD 1.3 trillion market

7.7%

445

1.5%

1,09

6

~3.2%

3.4%

189

2.4%

Total Revenue USD billion

IT Services

BPM Packaged Software

Hardware ER&D

665

1,75

4

Growth 4.3% ~USD 1.3 trillion

Source: IDC

According to Gartner, worldwide IT spending is estimated to be USD 3.7 trillion in CY2018, an increase of 4.5% from CY2017 spending of USD 3.5 trillion. It is forecasted to exceed USD 3.8 trillion by CY2019.


In CY2017, the Global IT-BPM industry stood at USD 1.3 trillion (excl. hardware), a growth of 4.3% over CY2016. The IT services grew modestly at 2.4% primarily led by the continuous need for digital solutions. BPM grew at 3.4% driven by increased BPaaS adoption, Robotic Process Automation (RPA) and Analytics. Global IT-BPM is forecasted to increase to USD 4 trillion by CY2025, driven by the adoption of digital technologies. India’s IT-BPM industry grew at an estimated rate of ~8% in FY2018 to USD 167 billion from USD 154 billion in FY2017. Most of the mid cap IT companies grew faster compared to Tier 1 IT companies mainly helped by focus on new-age digital offerings in selective industry verticals. By FY2020, India’s IT-BPM sector is projected to reach USD 200-225 billion revenue and USD 350-400 billion by FY2025. (NASSCOM 2018)

The IT industry is now well equipped to manage the stage of Bi-modal IT. Blending more predictable evolution of products and technologies with the new and innovative is the essence of an enterprise bimodal capability. According to NASSCOM, currently the traditional services (ISO, CADM, software testing etc.) continue to have a major share of revenue (~80%), the share of digital revenue is increasing rapidly. Market evolution and thrust to get along with the disruptive environment is likely to lead the way to a new face of IT-BPM industry.

MASTEK – BUSINESS UPDATE

IT Services Industry

In the age of digitalisation, IT firms are investing substantially to build the necessary skills and digital capabilities to address new and changing customer demands. Gartner has projected IT services spending in CY2018 to USD 985 billion worldwide, growth of 5.5% over CY2017. In CY2019, it is expected to grow at 4.6% to USD 1,030 billion. The global IT services market is estimated to grow at a 5% CAGR for the forecast period of CY2016-CY2020 as per Technavio’s latest report. Organisations are increasingly outsourcing their IT-related requirements such as application and infrastructure management to IT service providers. The global sourcing growth outperformed global IT-BPM spend growth in CY2017, global sourcing grew at 1.4 times to reach USD 185-190 billion as per NASSCOM report. India remained the world’s top sourcing destination with a share of 55%. Indian IT services export stood at USD 69 billion, a growth of 6% over 2017 driven by growth in software testing and ISO (hosted applications).

According to Technavio’s latest report, key segments in IT services are Project-oriented services, IT outsourcing services, IT support and training services and Enterprise cloud computing services. The Enterprise cloud computing services is the fastest-growing segment and is expected to grow at a CAGR of 25% for the forecast period of CY2016 - CY2020 mainly due to the increased use of cloud-based solutions by enterprises for cost reduction

and efficiency. The augmented adoption of cloud computing services such as software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS) is expected to remain key growth drivers going forward.

Region wise, the Americas continue to dominate the IT services market and accounts for around 45% of the total market share. Factors such as growing emphasis on developing an IT- efficient infrastructure is expected to increase the adoption of IT services in this region. Traditional and mature verticals - BFSI, Manufacturing and Telecom continue to drive the growth while the share of Healthcare and Retail verticals augmented as Social, Mobility, Analytics and Cloud (SMAC) adoption increased across key industries.

The deep penetration of Machine Learning (ML), IoT and Big Data in the global business environment has sparked the need for Business Intelligence (BI) and Analytics systems. If the current BI systems are used in Banking and Financial services, Retail, Healthcare and other industries, then Smart Data Discovery, powered by Machine Learning will be proven to be the next game changer for businesses of all sizes and shapes. According to Gartner, the global Business Intelligence (BI) and Analytics software market touched USD 18.3 billion in CY2017 and is expected to grow to USD 22.8 billion by CY2020. The key factors driving the growth of the market include:

• DevelopmentofmodernBItoolswhichcanbeusedwithoutIT assistance

• Emergence of smart data discovery capabilities, machinelearning and automation driven software

• Ability to rapidly prepare, clean, enrich and find trusteddatasets in a more automated way

• Generationofreal-timeinsightsfromstreamingdatasourcedfrom devices and sensors

• Easy cloud deployments of BI and analytics platforms toreduce cost of ownership and speed time to deployment

This reflects data and analytics becoming mainstream in coming years. Modern BI and analytics tools have broken the traditional

The Enterprise cloud computing services is the fastest-growing segment and is expected to grow at a CAGR of 25% for the forecast period of CY2016 - CY2020 mainly due to the increased use of cloud-based solutions by enterprises for cost reduction and efficiency.

29Mastek Limited


data warehousing paradigms by abstracting end-to-end process, not requiring semantic models or even a data warehouse. The use of modern BI and analytics software is helping organisations gain deeper analytical insights and serve customers effectively. In the current scenario, North America is expected to be the largest market based on spending and adoption of Business Intelligence and analytics software market.

Digital Transformation

It has been an eventful year for digital transformation. Disruptive by nature, digital technologies are continually transforming the business landscape. While the user experience, big data and smart machines proven to be big players in the business landscape in 2017; emerging technologies such as IoT, RPA, Analytics, Cloud, Blockchain and AI will remain key growth drivers for digital economy in 2018. These technologies have changed the traditional paradigms of the industry forcing to modernise existing legacy systems. The industry continue to re-structure itself to become the Digital Solution Partner of choice for its customers. DevOps and agile development are becoming mainstream and helping faster time-to-market in today’s disruptive environment. IDC predicts by 2020, 60% of all enterprises will have fully articulated an organisation-wide digital transformation platform strategy and will be in the process of implementing that strategy as the new IT core for competing in the digital economy. The strategic use of technologies to create platform business models is driving unprecedented growth opportunities in the rapidly expanding digital economy. Platform-based business models and engaging in the eco-systems of digital partners are emerging as critical factors for business success. According to NASSCOM-McKinsey Perspective 2025 report, non-linear growth is going to be more pronounced in the future as enterprises increase automation of their businesses. The Digital transformation is allowing companies to offer customised and end-to-end solution to the customer. The exponential growth in digitisation and internet connectivity is the backbone of the “Fourth Industrial Revolution”. It has the potential to propel societies forward, enable innovative business models and help governments address legitimate policy concerns.

In India, the adaption of digital technologies at the enterprise level is still at a nascent stage. Spend on social media is highest; while security, analytics spend is less than 5% of the total IT budget. BFSI, Telecom and Retail verticals are already on the digital transformation journey while Healthcare is in the early

stage of adopting technologies and is yet to define a digital strategy at the organisation level.

To conclude, digital transformation is no longer about enhancing and supporting traditional legacy technology. It is all about transforming business using creative and smart innovative technology solutions to open new opportunities and new markets. 2018 will force many organisation to realise that digital transformation is crucial in today’s market to survive. Disruption will continue to be an increasingly common occurrence in the next few years.

Mastek Limited is well poised to be amongst the top providers of agile digital transformation solutions.

Indian Market

In last 2 years, Indian economy witnessed two major disruptive reforms-Demonetisation and implementation of GST. However, the economy remained resilient and displayed positive growth. Major global economies (especially US) are showing signs of inching up and these should aid the growth in the Indian IT market.

India’s share in global IT spend has been constantly expanding touching the double-digit mark with enterprises investing in digital platform solutions such as cloud, mobility and bigdata as key drivers of this spending growth. India’s value proposition for the global IT industry is steadily shifting towards offering end-to-end digital technologies. India is on track to set itself up as the Digital capabilities hub for the world. Following data sourced from NASSCOM validates the same:

• 8,100+firmsofferingdigitalsolutions

• Boastsofadigitally-skilledtalentpoolof4,50,000-5,00,000.

• Accountsfor~75%ofglobaldigitaltalent

• IndianIT-BPMfirms:18-20%shareofdigitalintotalrevenue

According to NASSCOM, the Indian IT-BPM industry grew at an estimated rate of ~8% in FY2018 – from USD 154 billion in FY2017 to USD 167 billion (excl. ecommerce). Of the total Indian IT services market in FY2018, 80% contribution was from exports revenue and remaining 20% came from domestic markets. The domestic market witnessed a growth of 13.5% to USD 17 billion in FY2018 while exports market grew at 6% during the same period to reach USD 69 billion. ER&D and product development continued to be the fastest growing segment at 12.8% driven by the demand for AECS-autonomous, electrification, connectivity and shared mobility. To stay competitive with the global markets, the Indian IT firms are investing in strategic partnerships and merger & acquisitions to acquire next-gen digital capabilities and niche digital talent.

During the year under review, cloud-based transactions, Artificial Intelligence, IOT, Big Data analytics, augmented and virtual

India’s value proposition for the global IT industry is steadily shifting towards offering end-to-end digital technologies.


reality and Blockchain became buzzwords across the country. Government of India’s reforms/schemes such as Aadhaar linkage, Jan Dhan Yojana or Banking for all, Demonetisation, Digital India and the rollout of GST, fuelled technology adoption in the nation. The Government has a strong focus on transforming the country into a cashless economy. CY2018 is expected to see a broader adoption and impact of these initiatives.

Mastek in UK

According to OECD Economic Outlook report, UK economy growth is estimated to be 1.3% in CY2018 and 1.1% in CY2019. The stronger global economies and the competitive value of pound against euro is likely to boost exports, consequently supporting the overall UK GDP growth.

While Brexit discussions are creating drag in business investments, IT spend in government space is expected to increase to support huge changes in the existing systems and a myriad of new systems. According to GlobalData, there are at least 27 core systems across central government that will need to be reconfigured or rewritten as a result of changes to immigration, borders and customs controls. Mastek holds successful long- term client relationship with Home Office and Health, which are expected to have a bigger share of Brexit IT projects while other key sectors continues to maintain significant spend in line with earlier years.

Apart from Brexit, the continuous unbundling of larger IT projects into smaller more manageable ones, which are awarded to SMEs, is also expected to benefit Mastek. According to GlobalData, UK public sector spent more than GBP 1 billion across digital services, DOS and G-cloud. This together with key digital programmes driven by “Digital by Default” agenda of UK government, represents a large market opportunity for Mastek in UK.

Mastek UK is registered with the G Cloud and the GDS frameworks which has helped create a good pipeline of opportunities in the Government sector. Mastek has also been awarded a contract to provide strategic DevOps capability for the UK Government Immigration programme. The direct customers in the government sector see value in their association with Mastek. On the back of this foundation, the Company has received several reputed projects this year.

Mastek UK continued to be ranked among the top vendors in delivering large complex programs in an agile manner and helping government to cut cost and time in delivery.

In the Retail sector, Mastek UK has successfully opened new accounts and look forward to growing this business at a steady pace. The Company’s Financial Services division has been

strengthened with addition of marquee clients, including 3rd largest building society providing banking and financial services and leading European international financial institution, during the year and is expected to deliver on a strong base in the coming fiscal year.

Company derived 69% of its revenue from the region.

Mastek in North America

The US economy grew at 2.3% in CY2017 and is estimated to grow at 2.9% in CY2018 mainly driven by President Trump’s tax cuts and increased consumer spending. The massive reduction in the corporation tax rate from 35% to 21% is likely to stimulate business investment and growth in the near term. US continues to remain the largest IT market, presenting huge growth opportunities to IT companies with Solutioning capabilities.

In United States, Mastek provides end-to-end solutions to Financial and Retail organisations using its unique agile-based Adapt 2.0 methodology. The Company’s subsidiary, Digility Inc. provides solution around client portals, mobility, information centralisation, Big Data and testing services.

Aligned to Company’s strategy to be a leader in Digital Commerce Transformation and Solutions, Digility acquired TAISTech, US-based leading digital commerce solution provider, to augment service capability and offerings in digital commerce space. TAISTech provides strategic consulting, large-scale digital commerce implementations and support for the Oracle ATG and Oracle Commerce Cloud applications. It also provides omni-channel strategy, creative design, mobile app development, ongoing maintenance and training. The acquisition has created a platform for Mastek’s accelerated growth in the US market and will augment Mastek’s 2020 vision to be a global leader in digital transformation services.

US B2C online sales are expected to reach USD 650 billion by 2022 (Source: Statista) and it is expected to command 32.6% share of global online B2B sales by 2025 (Source: Frost & Sullivan), thus creating significant opportunity for Mastek. Commerce mordernisation (migration from ATG to Cloud), Omni-channel and B2B will be key focus areas for Mastek.

In line with our expectation, US operations contributed ` 23,715 lakhs, representing 29% of total operating revenue in FY2018. The Company sees significant momentum going forward in this region.

Further, Mastek positions itself as a “Digital Transformation Company” with full spectrum of service and aims to enhance its digital commerce offerings by adding complimentary capabilities including UI, UX, CPQ, et al.

31Mastek Limited


Additionally, Mastek in United States will look for opportunities in cross-selling of core capabilities like Assurance & Testing, BI, Analytics and the Application Development, being the Company’s core strength. The Company aims to go hand in hand with the clients on their journey to transform business digitally and provide them with quality solutions.

Mastek in India and Asia-Pacific

India and Asia-Pacific continues to be an important geography for the Company. However, during the year, Company decided to opt for selective bidding and ensured only viable projects and long-term customer relationship is secured.

Review of Financial and Operating Performance

Financial performance review

For the year ended March 31, 2018, our business performance in terms of revenue and profits witnessed strong growth.

Financials

On a consolidated basis, the Group registered total operating revenue of ` 81,721 lakhs for the year ended March 31, 2018 as compared to ` 56,016 lakhs for the year ended March 31,2017, reflecting a growth of 45.9%. The Group registered a net profit of ̀ 6,996 lakhs for the year ended March 31, 2018 as compared to ` 3,241 lakhs in the year ended March 31, 2017, reflecting a growth of 115.9%.

Break-up of Revenue by Regions

Regions Year ended March 31, 2018

Year ended March 31, 2017

(` in lakhs)

% of Revenue

(` in lakhs) % of Revenue

UK 56,315 68.9% 46,040 82.2%

North America

23,715 29.0% 7,078 12.6%

Others (India/Asia-Pacific)

1,691 2.1% 2,898 5.2%

Total Operating Revenue

81,721 100.0% 56,016 100.0%

The U.K. operations contributed ` 56,315 lakhs in total operating revenue for the year 2017-18 as compared to ` 46,040 lakhs for the year ended 2016-17, resulting in a growth of 22.3%. This growth was driven by increased business in the Government vertical followed by Retail and Finance vertical. UK business grew by 27.6% on constant currency basis.

The North America operations contributed ` 23,715 lakhs in revenue for the year 2017-18 witnessing a growth of 235%, driven by full year revenue contribution and growth from TAISTech acquisition.

Revenue of other region i.e. India and Asia-Pacific region is ` 1,691 lakhs for the year 2017-18 as compared to ` 2,898 lakhs for the year 2016-17, resulting in a decrease of (41.6%). The degrowth is due to selective bidding in this segment during the year as part of Group strategy.

Break-up of Revenue by Service Lines

Service Lines 2017-18(̀ in Lakhs)

% of Revenue

2016-17(` in Lakhs)

% of Revenue

Application Development

38,891 47.6% 32,480 58.0%

Digital Commerce

21,211 26.0% 5,614 10.0%

Application Support & Maintenance

8,008 9.8% 8,495 15.1%

BI & Analytics 6,484 7.9% 2,007 3.6%Agile Consulting

4,771 5.8% 5,473 9.8%

Assurance & Testing

2,356 2.9% 1,947 3.5%

Total 81,721 100.0% 56,016 100.0%

Profitability

During the year ended March 31, 2018, the Group earned a profit of ` 6,996 lakhs as compared to ` 3,241 lakhs for the year ended March 31 2017. The profits for the financial year ended 2017-18 achieved growth of 115.9%, driven by focussed profitable growth in revenue, acquisition in US, operational improvement and better utilisation of existing investment in SG&A and capacity to service growth.

Balance Sheet

Non-current Assets

1) Property Plant and Machinery

Tangible assets as at March 31, 2018 were ` 4,589 lakhs ascompared to ` 4,331 lakhs in the previous year. Variance isexplained as below:

Mastek will position itself as a “Digital Transformation Company” with full spectrum of service and will aim at enhancing its digital commerce offerings by adding complimentary capabilities including UI, UX, CPQ, et al.


- Gross addition of ` 1,124 lakhs toward Computers,Furnitures and Fixtures

- Depreciation charge of ` 879 lakhs

- Foreign exchange translation adjustment of ` 13 lakhs

2) Other Intangible Assets and Goodwill

Intangible assets as at March 31, 2018 were ` 13,297lakhs as compared to ` 13,647 lakhs in the previous year.Variance is explained as below:

- Gross addition of ` 372 lakhs on acquisition andpurchase of computer software

- Depreciation charge of ` 997 lakhs

- Foreign exchange translation adjustment net of` 275 lakhs

3) Non-Current Financial Assets

A) Investments

Non-Current investment comprises Investment inMajesco USA (quoted). The Non-Current Investmentsbalance as at March 31, 2018 were ` 16,637 lakhs ascompared to ` 16,882 lakhs in the previous year. Itwas majorly reduced on account of fair valuation ofinvestments. As per Ind AS 109 it is measured at FairValue through Other Comprehensive Income (OCI).

B) Loan and other non- current financial assets

The loan and other current financial assets as atMarch 31, 2018 were ` 201 lakhs as compared to` 459 lakhs in the previous year. Movement is due torealisation of forward contracts during the year andGBP appreciation.

4) Other Non-current Assets

The Non-current assets as at March 31, 2018 stood at` 86 lakhs as compared to ` 72 lakhs in the previous year.

5) Income Tax Assets/Liabilities

The Income tax assets balance as at March 31, 2018 was` 839 lakhs as compared to ` 2,087 lakhs in the previousyear. Reduction is primarily driven by refund received duringthe year. The current income tax liabilities balance as atMarch 31, 2018 was ` 885 lakhs as compared to ` 414lakhs in the previous year.

6) Deferred Tax Assets/Liabilities

The deferred tax as at March 31, 2018 were ` 5,304 lakhsas compared to ` 3,648 lakhs in the previous year. Deferredtaxes primarily comprise deferred tax on property plant andmachinery, compensated absences and compensation toemployees and cash flow hedge. The Deferred tax liabilitieswere ` 1,865 lakhs as compared to ` 2,654 lakhs in the

previous year. The deferred tax liability primarily comprises undistributed profit of subsidiaries.

7) Current Financial Assets

A) Investments

Investments comprised of quoted mutual fund unitsand fixed deposits. The Investments balance was` 11,770 lakhs as at March 31, 2018 as compared to` 10,502 lakhs in the previous year.

B) Trade Receivables

Trade receivables as at March 31, 2018 stood at` 13,514 lakhs as compared to ` 8,509 lakhs in theprevious year. Days sale outstanding was 67 days,compared to 55 days in the previous year.

C) Cash and bank balance

The Cash and Bank balance as on March 31, 2018was ` 8,802 lakhs as compared to ` 4,797 lakhs in theprevious year.

D) Loans and other current financial assets

The loan (refundable deposits) as at March 31, 2018was ` 44 lakhs as compared to ` 12 lakhs in theprevious year. The current financial assets were ` 7,670lakhs as compared to ̀ 7,383 lakhs in the previous year.

8) Other Current-Assets

Other current assets were at ` 1,037 lakhs as at March 31, 2018 as compared to ` 794 lakhs in the previous year. The increase was driven by advance to suppliers, input tax credit and prepaid expenses.

Equity and Liabilities

9) Total Equity

We have one class of share- equity share capital of parvalue ` 5 each. The issued, subscribed and paid-up capitalstood at ` 1,185 lakhs as at March 31, 2018, which was` 1,169 lakhs in the previous year. The Company has allotted 314,523 shares under employees stock option plans duringthe financial year.

Aligned to Company’s strategy to be a leader in Digital Commerce Transformation and Solutions, Digility acquired TAISTech, US-based leading digital commerce solution provider, to augment service capability and offerings in digital commerce space.

33Mastek Limited


10) Non-Current Financial Liabilities

A) Borrowings

The non-current borrowings as at March 31, 2018was ` 4,961 lakhs as compared to ` 6,523 lakhsin the previous year. The decrease is on account ofclassification of current component of long-term loanin other current financial liabilities.

B) Other financial liabilities

The other financial liabilities as at March 31,2018 was ` 2,653 lakhs as compared to ` 3,838lakhs in the previous year. The decrease is onaccount of classification of current component andpayment of contingent consideration related tobusiness acquisition.

11) Provisions

The Long-term provision balance as at March 31, 2018 was` 664 lakhs as compared to ̀ 967 lakhs in the previous year.The movement is driven by Gratuity and leave encashmentaccruals and related actuarial assumptions.

12) Current Financial Liabilities

A) Borrowings

The Current borrowing as at March 31, 2018 was` 391 lakhs as compared to ` 2 lakhs in theprevious year.

B) Trade payables

The trade payable as at March 31, 2018 were` 1,889 lakhs as compared to ` 1,989 lakhs in theprevious year.

C) Other current financial liabilities

The current financial liabilities as at March 31, 2018were ` 10,929 lakhs as compared to ` 6,310 lakhsin the previous year. The increase is on account ofclassification of current component of term loan,contingent consideration and foreign exchangeforward contract.

13) Other Current-Liabilities

The current liabilities as at March 31, 2018 were ` 4,359lakhs as compared to ̀ 3,214 lakhs in the previous year. Theincrease was primarily on account of statutory dues payablein subsequent month.

14) Provisions

The Short-term provision balance as at March 31, 2018 was` 474 lakhs as compared to ` 328 lakhs in the previousyear. The difference is on account of employee benefits andrelated actuarial assumptions.

Operations review

High quality operational delivery has always been a core attribute at Mastek. The Company aligned the delivery organisation to focus on improving the overall productivity and efficiency levels within projects.

During the year under review, the Company’s project Home Office Immigration Technology Programme won the prestigious ‘Best Use of Cloud Services’ award at the UK IT Awards 2017. Digility’s recognition in the Banking & Financial Services Industry stems from Mastek’s solutions that revitalise the customer experience and delivers results that enable customers to thrive in a dynamic and challenging industry.

The Company’s acquisition of TAISTech will help accelerate the growth in the United States market with offerings focussed in Digital Commerce Transformation space. Company specialises in large-scale commerce implementations and support for the Oracle ATG and Oracle Commerce Cloud applications; it offers omni-channel strategy for its Retail Customers to embark on their Digital Commerce Transformation which includes micro services, creative design, mobile app development apart from ongoing maintenance and training. Insights Success magazine recognised TAISTech as one of the 10 fastest growing oracle solution provider companies, 2017 in its June 2017 issue.

Client wins during the year

Mastek added 42 new clients during the year and completed the year with 170 active clients. The client profile includes marquee names across verticals in US, UK and India.

During the year under review -

• WontwoprojectswiththeUKGovernmentDefenceprogramme. These include a project to support andenhance the existing data warehouse and the deliveryof secure application support services

• Wonmulti-year contract to deliver new digital dataplatform to a leading European international financeinstitution. The client is a global developmentinvestment bank that uses investment as a tool tobuild market economies in developing and emergingcountries. The new data platform will increaseoperational efficiencies and customer engagementacross multiple countries for the client

• SelectedbyleadingUK-basedlendertodeliverdigitaltransformation services. It operates in business of retail and commercial secured lending, offering its servicesto specialist market segments in the UK directly andthrough a network of brokers


Update on Board of Directors: The Mastek Board currently has 6 members, of which 4 are Independent Directors and the remaining 2 are Promoter Directors.

Update on Management: In August 2017, Mastek appointed Ms. Maninder Kapoor Puri as its Group Chief People Officer. Maninder is based out of Mumbai as part of the Executive Committee and report to the Group CEO. She has 24 years of experience in supporting and managing global businesses across recruitment, training, development, quality and HR.

In September 2017, Robert Hart King joined the Company as CEO of Americas, reporting into Group CEO. Robert brings in relevant experience in the geography to drive the Digital Commerce Transformation initiative. He has 34 years of experience in IT industry across Oracle, Consulting Services, Customer Support & ERP.

People Strength: As on March 31, 2018, the Company had a total headcount of 2,058 as compared to 1,577 employees at the end of March 31, 2017. 35.5% of current employee strength resides in onshore locations of USA and UK whereas the rest of them are in offshore locations in India. The Company continues to recruit fresh talent and intends to add more technical resources at various levels during the new fiscal.

Dividend: The Company paid an interim dividend totaling to 40% (` 2.00 per share) for the year 2017-18. The Company has recommended a final dividend of 80% (` 4/- per share) at the meeting held on April 18, 2018. Total Dividend for the year 2017-18 including interim dividend works out to 120% or ` 6.00 per share for Face Value of ` 5.00 per share.

Industry Recognition: Mastek, either directly or through its clients received multiple awards and accolades during the year including:

• Home Office Immigration Technology Programmewon the prestigious ‘Best Use of Cloud Services’award at the UK IT Awards 2017. This is a projectthat Mastek has been involved in delivering since itsinception in 2013

BUSINESS OUTLOOK

Mastek closed the financial year with a satisfactory performance, achieving growth across all the parameters as well as making Mastek a future-ready organisation. Along with focus on the Company’s core areas of business, viz. Government, Retail and Financial Services; Mastek is on its journey towards expanding its footprint in the United States with the acquisition of TAISTech in the last year. The focus on core business along with added capabilities will result in opening up of newer opportunities

across geographies of the Company’s focus. The Company aims to keep investing in agile methodologies to be involved in large and complex transformation programmes which will help its customers to leverage digital opportunities in an agile manner. The Company sees significant traction in agile and digital transformation solutions and expects a good growth momentum going forward.

To summarise, the Company is well poised to achieve its objectives outlined under, “Vision 2020” i.e. to be a global leader in digital transformation services. Mastek is eyeing for an all-round growth in Agile and Digital Transformation space and geared up to unlock its potential.

INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT

Mastek’s systems for internal control and risk management go beyond what is mandatorily required to cover the best practice reporting matrices and to identify opportunities and risks with regard to its business operations.

Internal Control Systems

The Company has mechanisms in place to establish and maintain adequate internal controls over all operational and financial functions. The Company intends to undertake further measures as necessary in line with its intent to adhere to procedures, guidelines, and regulations as applicable in a transparent manner.

Mastek maintains adequate internal control systems that provide, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of Company assets. The Company uses an Enterprise Resource Planning (ERP) package that enhances the efficiency of its internal control mechanism.

The Company’s internal control systems are supplemented by an internal audit programme and periodic reviews by the management. Mastek has appointed an independent audit firm as its Internal Auditors, and the Audit Committee reviews its findings and recommendations at periodic intervals. Mastek’s

The financial year with a satisfactory performance, achieving growth across all the parameters as well as making Mastek a future-ready organisation. Along with focus on the Company’s core areas of business, viz. Government, Retail and Financial Services.

35Mastek Limited


internal control system is adequate considering the nature, size and complexity of its business. Mastek has also put in place a strong enterprise risk management function which oversees the risk management of the Company on an ongoing basis.

Enterprise Risk Management

Enterprise Risk Management (ERM) plays a vital role to:

• Provideaframeworkthatenhancesriskresponsedecisions

• Reduceoperationalsurprisesandtherebylosses

• Identifyandmanagecross-enterpriserisks

At Mastek, we have a Board-approved ERM policy which emphasises on the importance of having a strong risk management culture in the organisation. Our ERM policy focusses on the risk assessment, risk management, expected outcomes, governance and reporting structure at Corporate & Regional levels.

Risk Governance Structure

The success of the Company is dependent on how it manages the risk inherent in the business. The Company operates in a highly competitive segment which is widely affected by the various external and internal risks. Thus, to minimise the effect of such risks, the Company has put in place a strong risk governance model to ensure risk management. The ERM process and policy is approved by the Governance Committee of the Board and is executed through the Risk Management Committee (RMC) represented by the business and functional heads within Mastek. The RMC is responsible for:

• being the primary champion of risk management atstrategic and operational level

• settingpolicyandstrategyforenterpriseriskmanagement

• ensuring that riskmanagement policies are implementedwith the right spirit through a monitoring mechanism

• building a risk-aware culture within the organisationincluding appropriate trainings

• informingtheBoard(throughtheAuditCommittee)

• the ERM status and top risks of the Company on atimely basis

Risk Champions: The RMC is supported by the risk champions who are responsible for:

• providingoversighttolinemanagerswhomanageriskonaday-to-day basis

• promotingriskawarenesswithintheiroperations

• ensuringthatriskmanagementis incorporatedrightfromthe conceptual stage of projects/opportunities

• ensuringcompliancetotheriskmanagementprocedures

• providingperiodicreportstotheRMC

Mastek provides a diverse array of services and there are multiple factors that could affect its future performance. Some significant risks that could affect the operations have been identified as below:

Macro-economic risks: Company’s business may be affected by global political uncertainties, changes in interest rates, changes in policy, taxation and other economic developments. These changes can adversely affect the Company’s outlook. Considering the nature of business, the volatility in foreign currency exchange rates could have a negative impact on the Company’s performance. The Company has geographically diversified thereby reducing its dependency on one market or country. The Company also takes necessary steps such as forex hedging to mitigate exchange rate risks.

Strategic risks: This is an era of disruption. The Company is prone to significant and unfavourable shift in returns on capability investments, industry trends, customer preferences. Any unfavourable change in the trend, the Company is prone to the risk of innovation, business or product portfolio. Our client concentration risk is limited to an extent as Mastek has a deep-rooted relation with most of the customers.

Competition-led risks: The technology market has become so evolving and prominent that the risk of competition especially from technology giant from both India and abroad has increased. Thus, the shift of any major existing or prospective clients could affect the Company’s business. Although, the Company is well on its toes to serve the customer with its strong domain expertise, robust delivery capabilities, and significant project experience, there is no guarantee that it will always get the better of competition.

Dependence on key personnel: Employee attrition and/or constraints in the availability of skilled human resources could pose a challenge to any services company. The Company believes that its personnel are key to its success and has initiated multiple steps for overall development of its employees. We encourage entrepreneurship culture within the organisation and offer new challenges and opportunities for our employees. We have made significant investments in our recruitment and training procedures. Mastek Limited does endeavour to have an effective succession plan in place to mitigate these risks.

Client and account risks: The Company’s strategy is to engage with a few strategic customers and build long-term relationships with them. Any shift in customer preferences, priorities, and internal strategies can have an adverse impact on the Company’s operations and outlook. Mastek does have the benefit of being very well entrenched with many of its customers, involved in their critical and strategic initiatives. Therefore, client concentration-related risks are mitigated to an extent.


Contractual, execution and delivery-related risks: The level of engagement and contract with the client exposes the Company to execution risk. In remote scenarios of any inability to adhere to delivery or quality, SLA can adversely affect our relation. Any termination or modification of contracts and non-fulfilment of contractual obligations by clients due to their own financial difficulties or changed priorities or other reasons can expose operational risk on the Company. Mastek does have mechanisms in place to try and prevent such situations, as well as insurance cover as necessary.

Acquisition/M&A related risk: The Company has made acquisitions in the past when it comes to acquiring capabilities at the right price. We believe in reducing our time to tap

the opportunity offered in this age of IT transformation but at the same time, we have put in place stringent valuation criteria, diligence parameters and high standard of corporate governance practices for any target opportunity to cross the line.

There are multiple risk factors that the Company believes it will need to take cognizance of and manage. The Board and management team continually assess the operations and operating environment to identify potential risks and take meaningful mitigation actions. The Company’s senior management team and independent board of advisers monitor the progress of each opportunity pre- and post-closure.

****

37Mastek Limited


Directors’ Report

Dear Shareholders,

Your Directors have great pleasure in presenting the 36th Directors’ Report for the financial year ended March 31, 2018:

1. HIGHLIGHTS OF CONSOLIDATED AND STANDALONE FINANCIAL RESULTS

` in Lakhs

ParticularsConsolidated Standalone

2017-18 2016-17 2017-18 2016-17

Revenue from operations 81,721 56,016 16,232 16,948

Other Income 2,099 1,260 2,323 1,282

Total Income 83,820 57,276 18,555 18,230

Expenses 71,755 51,160 14,683 14,259

Depreciation and amortisation expenses 1,876 1,493 1,119 1,204

Finance costs 586 377 19 24

Exceptional items - 340 - 340

Profit before tax 9,603 3,906 2,734 2,403

Tax expense 2,607 665 1,160 91

Profit after tax 6,996 3,241 1,574 2,312

Other comprehensive income (248) (4,157) (1,315) 790

Total Comprehensive income 6,748 (916) 259 3,102

Equity Holders 6,748 (916) 259 3,102

Dividend (1,056) (233) (1,056) (233)

Dividend Distribution Tax (12) - (12) -

EPS

-Basic 29.74 13.96 6.69 9.96

-Diluted 28.14 13.38 6.33 9.55

2. OVERVIEW OF THE FINANCIAL PERFORMANCE

A. MASTEK OPERATIONS

On a Consolidated basis, the Group registered revenue from operations of ` 81,721 lakhs for the year endedMarch 31, 2018 as compared to ` 56,016 lakhs in theyear ended March 31, 2017, which is an increase of45.9%. The Group registered a net profit of ` 6,996lakhs in the year ended March 31, 2018 as comparedto ` 3,241 lakhs in the year ended March 31, 2017,thereby registering an increase of 115.9%.

On a Standalone basis, Mastek registered revenue fromoperations of ` 16,232 lakhs for the year ended March31, 2018, as compared to ` 16,948 lakhs for the yearended March 31, 2017. The Company made a Net profit of ` 1,574 lakhs for the year ended March 31, 2018 ascompared to Net Profit of ` 2,312 lakhs for the yearended March 31, 2017. Further details are included innotes to the Accounts of Standalone Financial Statement.

The Consolidated and Standalone Financial Statements of the Company for the year ended March 31, 2018 are prepared in compliance with the applicable provisions of the Companies Act, 2013 and Indian Accounting Standards (IND-AS). The said financial statements have been prepared on the basis of the audited financial statements of the Company and un-audited financial statements of its subsidiaries which have been reviewed by the Statutory Auditors.

No material changes or commitments have occurred between the end of the Financial Year and the date of this Report which affect the financial statements of the Company in respect of the Financial Year under review.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the Standalone and Consolidated Financial Statements along with the


Directors’ Report and Auditors’ Report thereon form part of this Annual Report. The Financial Statement of the Company and its subsidiaries are also available on the website of the Company and can be accessed at the weblink: http://www.mastek.com/financial-information.

B. BREAKUP OF THE OPERATING REVENUE BY REGIONS

Region Year ended March 31, 2018

Year ended March 31, 2017

` in Lakhs % of Revenue ` in Lakhs % of RevenueUK 56,315 68.9% 46,040 82.2%North America 23,715 29.0% 7,078 12.6%Others (India/Asia Pacific) 1,691 2.1% 2,898 5.2%Total 81,721 100.0% 56,016 100.0%

The U.K. operations contributed ` 56,315 lakhs in total operating revenue for the year 2017-18 as compared to ` 46,040 lakhs for the year ended 2016-17, resulting in a growth of 22.3%. This growth was driven by increased business in the Government vertical followed by Retail and Finance vertical. UK business grew by 27.6% on constant currency basis.

The North America operations contributed ` 23,715 lakhs in revenue for the year 2017-18 witnessing a growth of 235%, driven by full year revenue contribution and growth from TAISTech acquisition.

Revenue of other region i.e. India and Asia Pacific region is ` 1,691 lakhs for the year 2017-18 as compared to ` 2,898 lakhs for the year 2016-17, resulting in a decrease of (41.6%). The degrowth is due to selective bidding in this segment during the year as part of Group strategy.

C. BREAK UP OF REVENUE BY SERVICE LINES

Service Lines 2017-18 2016-17 ` in Lakhs % of Revenue ` in Lakhs % of Revenue

Application Development 38,891 47.6% 32,480 58.0%Digital Commerce 21,211 26.0% 5,614 10.0%Application Support & Maintenance 8,008 9.8% 8,495 15.1%BI & Analytics 6,484 7.9% 2,007 3.6%Agile Consulting 4,771 5.8% 5,473 9.8%Assurance & Testing 2,356 2.9% 1,947 3.5%Total 81,721 100.0% 56,016 100.0%

PROFITABILITY

During the Year ended March 31, 2018, the Group earned a profit of ̀ 6,996 lakhs as compared to ̀ 3,241 lakhs for the year ended March 31 2017. The profits for the financial year ended 2017-18 achieved growth of 115.9%, driven by focused profitable growth in revenue, acquisition in US, operational improvement and better utilisation of existing investment in SG&A and capacity to service growth.

3. HOLDING AND SUBSIDIARIES

Your Company continues to be the Holding Companyof Trans American Information Systems Private Limitedand Mastek (UK) Limited, which in turn has IndigoBlueConsulting Ltd, UK and Digility Inc. USA as its whollyowned subsidiaries.

Digility Inc. USA, the step down subsidiary of your Company has TAISTech LLC, USA and Trans American Information Systems Inc. USA as its wholly owned subsidiaries and consequently, they are also step down wholly owned overseas subsidiaries of the Company.

Your Company has two direct wholly owned subsidiaries, and four step down subsidiaries as at March 31, 2018 and the statement containing salient features of the financial statements of all the subsidiaries along with the highlights of the performance of the subsidiaries and their contribution to overall performance of the Company are provided in Form AOC-1 is annexed as Annexure 1.

4. BUSINESS

Your Company is a Global IT service provider focusedon Enterprise Digital Transformation in agile manner. It

39Mastek Limited


combines the business knowledge and industry expertise of its domain specialists and the technical knowledge and implementation skills of its Delivery team leveraging its Tools, Platforms, Partnerships and Solutions in its Development Centers located across India, UK and US.

Your Company offers comprehensive services covering full range of the software development process starting with agile consulting, application development, testing, to ongoing support and maintenance. With over three decades of experience and excellent track record of delivery, manifesting in our 96% delivery success ratio, has empowered us with the capability to drive the growth of our diverse clients.

In the UK, rate of growth is likely to be subdued owing to uncertainty over the outcome of Brexit negotiations. However, it provides significant opportunity to Mastek as atleast 27 core systems across central government will need to be reconfigured. This includes immigration, borders and customs controls amongst other departments. Mastek holds successful long term client relationship with proven track record with Home office and Health which are expected to have bigger share of IT spend.

In the US, your Company is supporting its customers in Digital Commerce space to modernise and compete in evolving Retail sector which is undergoing disruption and significant transformation in acquiring and retaining customers.

Businesses across globe recognise the imperative to leverage new and emerging technologies to drive efficiencies. As per Forbes, more than 84% of digital transformation projects fail to meet expectations. Your Company, with proven capabilities in delivering large and complex enterprise-wide transformation projects, is well placed to successfully partner businesses from end-to-end in their transformational journeys.

For further details, please refer Management Discussion Analysis Report.

5. OUTLOOK

Your Company closed the financial year with a satisfactoryperformance, achieving growth across all the parametersas well as making Mastek a future-ready organisation. TheCompany is well poised to achieve its objectives definedunder “Vision 2020” i.e. to be a global leader in digitaltransformation services. Mastek is eyeing for an all-roundgrowth in agile and digital transformation space and geared up to unlock its potential.

For further details, please refer Management Discussion Analysis Report.

6. DIVIDEND & RESERVES

The Board of Directors at its meeting held on October 26,2017 approved payment of Interim Dividend of ` 2/- pershare (Face value of ` 5/- each) i.e. @ 40% which was paidon November 15, 2017.

Further, the Board of Directors at its Meeting held onApril 18, 2018 were pleased to recommend the paymentof a final dividend @ of ` 4/- per equity share (face valueof ` 5/- each) i.e. @80%, subject to the approval of theShareholders at the ensuing 36th Annual General Meeting.

Therefore, the total dividend for the financial year endedMarch 31, 2018 stands at ` 6/- per share, involving antotal outflow approximately of ` 1,422 lakhs compared to` 3.50/- per share paid during the previous year.

The final dividend, if approved, at the ensuing 36th AnnualGeneral Meeting (AGM), will be paid to those shareholderswhose names appears on the Register of Members of theCompany as of the end of the day on July 12, 2018, beingthe record date.

During the year, under review, no amount from profit wastransferred to General Reserves.

7. PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTUNDER SECTION 186 OF THE COMPANIES ACT, 2013

In compliance with the provisions of the CompaniesAct, 2013, there were no loans or investment made bythe Company. Further the details of guarantee providedand outstanding are given in the respective Notes to theFinancial Statements.

Company had provided a Corporate guarantee in December, 2016 for an amount of USD 12 mn. and also security/charge/ mortgage over its Property as a Security for a termloan facility availed of an aggregate principal amount notexceeding USD 10 million from Bank valid for a period of5 (five) years for acquisition of 100% share-holding in twoUS based software services companies by Digility Inc. a firstlevel step-down subsidiary of the Company.

8. OTHER DISCLOSURES UNDER THE COMPANIESACT, 2013

i) Extract of Annual Return:

Pursuant to section 92(3) of the Companies Act,2013 (‘the Act’) and Rule 12(1) of the Companies(Management and Administration) Rules, 2014,extract of Annual Return is annexed as Annexure 2.

ii) Number of Board Meetings:

The Board of Directors met 5 (Five) times duringthe financial year 2017-18. The details of the board


meetings and the attendance of the Directors there at, are provided in the Corporate Governance Report, appearing elsewhere as a separate section in this Annual Report.

iii) Change in Share Capital:

During the year, the Company allotted 3,14,523Equity Shares of face value of ` 5/- each for a totalnominal value of ` 15,72,615 under various ESOPPlans to the eligible employees of the Company, whoexercised their vested Employee Stock Options. TheseEquity Shares rank pari passu in all respects with theexisting Equity Shares of the Company.

As on March 31, 2018, the issued, subscribed and paid up share capital of your Company stood at ` 11,84,60,280/- comprising 2,36,92,056 Equity shares of ` 5/- each. (Previous Year ` 11,68,87,665 comprising 2,33,77,533 Equity shares of ` 5/- each.)

iv) Composition of Audit Committee:

Mastek has an Audit Committee that currentlycomprises of four Independent Directors andone Non-Executive Director. The Chairman of theAudit Committee is an Independent Director. TheIndependent Directors are accomplished professionalsfrom the corporate fields. The Group ChiefFinancial Officer attends the meetings on invitation.The Company Secretary act as the Secretary tothe Committee.

During the year ended March 31, 2018 the Committee met 4 (Four) times. The details of the Audit Committee Meetings and the attendance of the Members there at, are provided in the Corporate Governance Report, appearing elsewhere as a separate section in this Annual Report.

During the year all the recommendations of the Audit Committee were accepted by the Board.

v) Related Party Transactions:

In line with the provisions of the Companies Act, 2013and the Securities and Exchange Board of India (ListingObligations & Disclosure Requirements) Regulations,2015 (“SEBI Listing Regulation”), the Company hasformulated a Policy on materiality of Related PartyTransactions and also on dealing with Related PartyTransactions. The same has been posted on thewebsite of the Company at https://www.mastek.com/corporate-governance

All the Related Party Transactions are entered into atan arm’s length basis and are in compliance with the

applicable provisions of the Companies Act, 2013 and SEBI Listing Regulations. There are no materially significant Related Party Transactions made by the Company with Promoters, Directors or Key Managerial Personnel, etc., which may have potential conflict with the interest of the Company at large.

Omnibus approval is given by Audit Committee for the transactions which are foreseen and are repetitive in nature. A statement of all Related Party Transactions is presented before the Audit Committee and the Board on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. The said transactions were unanimously approved by the Audit Committee as well as by the Board.

In accordance with Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contract or arrangement entered into by the Company with related parties referred to in Section 188(1) of the Companies Act, 2013 in FORM AOC-2 is annexed as Annexure 3.

vi) Changes in the Nature of Business:

There has been no change in the nature of business ofthe Company during the financial year ended March31, 2018.

vii) Listing with Stock Exchanges:

Your Company is listed with the BSE Limited andNational Stock Exchange of India Limited.

viii) Compliance with Secretarial Standards on Boardand Annual General Meeting:

The Company has complied with the SecretarialStandards 1 and 2 issued by the Institute of CompanySecretaries of India on Meetings of Board of Directorsand General Meetings.

ix) Insurance:

The Company has sufficiently insured itself undervarious Insurance policies to mitigate risks arising fromthird party or customer claims, property, casualty, etc.

x) Equity shares with differential rights:

Your Company has not issued any equity shares withdifferential rights as to dividend, voting or otherwise.

9. CREDIT RATING

The Company enjoys a good reputation for its soundfinancial management and the ability to meet its financialobligations. During the year under review, ICRA Limited, areputed Rating Agency, had reaffirmed the ratings assignedfor the bank facilities as [ICRA]A+ (Stable) rating for fund

41Mastek Limited


based limits and [ICRA]A1+ for non-fund based limits for the Working Capital facilities granted to the Company by its Bankers.

10. MANAGEMENT OF RISKS OF FRAUD, CORRUPTIONAND UNETHICAL BUSINESS PRACTICES

Whistle Blower Policy / Vigil Mechanism

In compliance with the requirement of the CompaniesAct, 2013 and SEBI Listing Regulations, the Company hasestablished a Whistle Blower Policy / Vigil Mechanism Policyand the same is placed on the web site of the Company. vizhttps://www.mastek.com/corporate-governance

The Company has a Vigil Mechanism for Directors andEmployees to report their concerns about unethical behavior,actual or suspected fraud or violation of the Company’s Code of Conduct. The mechanism provides for adequate safeguards against victimisation of Director(s) and Employee(s) who availof the mechanism.

The Company has also adopted Anti Bribery Policy and allconcerned staff / employees are trained to avoid fallingfoul of the laws in the respective geographies whereCompany operates.

The employees of the Company are made aware of thesaid policy at the time of joining the Company and are alsoprovided online training.

11. INDUSTRY RECOGNITION

Mastek Group received following awards / accolades,during the year:

• Mastek was a Finalist at the European TestingAwards 2017 within the ‘Best Test AutomationCategory - Functional’;

• 3rd prize in all India level NASSCOM Hackathon -“Build for India & Women in Technology”;

• UKITIndustryAwards–2017.

12. DIRECTORS’ RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls andcompliance systems established and maintained by theCompany, audit and reviews performed by the internalauditors, statutory auditors and secretarial auditors andthe reviews undertaken by the management and the AuditCommittee, the Board is of the opinion that the Company’sinternal financial controls have been adequate and effectiveduring the year under review.

Pursuant to the requirement of clause (c) of sub-section(3) of Section 134 of the Companies Act, 2013, and tothe best of their knowledge and belief and according tothe information and explanations obtained by them, yourDirectors make the following statements:

(a) that in the preparation of the annual financialstatements for the year ended March 31, 2018, theapplicable accounting standards have been followedalong with proper explanation relating to materialdepartures, if any;

(b) that such accounting policies as mentioned in Note1 of the Notes to the Financial statements have beenselected and applied consistently and judgments andestimates have been made that are reasonable andprudent so as to give a true and fair view of the state ofaffairs of the Company as at March 31, 2018 and of theprofits of the Company for the year ended on that date;

(c) that proper and sufficient care has been taken forthe maintenance of adequate accounting records inaccordance with the provisions of the CompaniesAct, 2013 for safeguarding the assets of theCompany and for preventing and detecting fraudand other irregularities;

(d) that the annual financial statements have beenprepared on a going concern basis;

(e) that proper internal financial controls to be followedby the Company have been laid down and that suchinternal financial controls are adequate and wereoperating effectively; and

(f) that proper systems have been devised to ensurecompliance with the provisions of all applicable lawsand that such systems were adequate and operatingeffectively.

13. STATUTORY AUDITORS, THEIR REPORT AND NOTES TOFINANCIAL STATEMENTS AND FRAUD, IF ANY

As per the requirements of the Companies Act, 2013,the Audit Committee and the Board of Directors at theirmeeting held on April 20, 2017 appointed M/s. WalkerChandiok & Co. LLP, Chartered Accountants (FirmRegistration No. 001076N/N500013), as the StatutoryAuditors of the Company and the shareholders of theCompany at the 35th Annual General Meeting (AGM)appointed M/s. Walker Chandiok & Co. LLP, CharteredAccountants (Firm Registration No. 001076N/N500013),as Statutory Auditors of the Company, for a period of 5years, commencing from the conclusion of 35th AGM tillthe conclusion of the 40th AGM, subject to ratification bymembers every year.

Ratification of the appointment of the Statutory Auditors, as recommended by the Board, is being sought from the Shareholders at the ensuing 36th Annual General Meeting of the Company.


Further, the report of the Statutory Auditors along with the notes is enclosed with the financial statements. The observations made in the Auditors’ Report which contains unmodified opinion are self-explanatory and does not contain any qualification/modified opinion. Therefore, it does not call for any further comments. Also the Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.

14. SECRETARIAL AUDIT

In terms of Section 204 of the Companies Act, 2013 andRules made thereunder, the Board of Directors at theirMeeting held on April 20, 2017 appointed Mr. SoumitraMujumdar, Practicing Company Secretary, as SecretarialAuditor of the Company for the financial year 2017-18.However, Mr. Soumitra Mujumdar had resigned w.e.f.November 30, 2017 as Secretarial Auditor voluntarily andto fill the casual vacancy in his place, Mr. Prashant S. Mehta,Practising Company Secretary was appointed by the Boardof Directors at their Meeting held on January 18, 2018 asthe Secretarial Auditor for the Financial Year 2017-18 toconduct Secretarial Audit and issue the Secretarial AuditReport pursuant to the provisions of Section 204 of theCompanies Act, 2013.

The report of the Secretarial Auditors is annexed asAnnexure 4 to this report. The report is self-explanatoryand does not contain any qualification. Therefore, it doesnot call for any further comments.

15. HUMAN RESOURCES

Mastek deploys its intellectual capability to create anddeliver Intellectual Property (IP)-led solutions that makea business impact for its global clients. For this, the keysuccess enabler and most vital resource is world-classtalent. Mastek continually undertakes measures to attractand retain such high quality talent.

As on March 31, 2018 Mastek Group had a total Headcount of 2,058. Your Directors wish to place on record theirappreciation for the contributions made by employees tothe Company during the year under review at all levels.

The disclosure required under Section 197(12) of theCompanies Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014 is annexed as Annexure 5 and forms part ofthis report.

16. EMPLOYEE STOCK OPTION PLANS

During the year under review, the Company had allotted3,14,523 equity shares under Employee Stock Option Plansto its eligible employee. The Board of Directors confirmsthat there is neither new plan introduced nor their are

any material change in the existing ESOP Plans and all the existing ESOP Plans are in compliance with the SEBI Guidelines. The required disclosures in this regard are annexed as Annexure 6 and forms part of this report.

17. ENTERPRISE RISK MANAGEMENT (ERM)

In terms of the requirement of the Companies Act, 2013,the Company has developed and implemented the RiskManagement Policy and the Board and the GovernanceCommittee of the Board reviews the risks and remedialmeasures taken on a periodical basis.

The risks are identified and discussed at regular intervals. The various risks are categorised as High risk, Medium risk and Low risk and appropriate mitigation steps/measures are taken/initiated to mitigate the identified risks from time to time.

The Company’s Risk Management Policy with a robust supporting risk management structure & frame work facilitates identification and assessment of new risks and review of already identified risks. The process is based on identified risks and the risk events or factors which require regular assessment and quick response. Based on the probability & impact of the risk, the requisite controls and mitigation action plans have been designed and implemented for risk treatment.

The objective of Risk Management in the Company is to act as an enabler in maintaining its knowledge edge, sustaining and expanding the business, being competitive and ensuring execution of projects within budgeted cost, time and quality, resulting in improved turnover and profitability.

Risk compliance verifications are reviewed regularly to test the compliance of controls & mitigation action plans and the summary is reported to the Board. This spreads awareness about various risk management activities/achievement, new topics/ practices/ updates on ERM and to create enthusiasm in them to proactively control risks in their work processes & areas. Mastek is committed to further strengthen its risk management capabilities in order to protect interests and enhance shareholder value.

18. UPDATES ON BOARD OF DIRECTORS/KEYMANAGERIAL PERSONNEL (KMP)

A brief profile of all the Directors has been given in theCorporate Governance Section which forms part of theAnnual Report.

A. Manner of Evaluation of the Board’s Performance

In compliance with Companies Act, 2013 and SEBIListing Regulations, the Board of Directors has carriedout an annual evaluation of its own performance,Board Committees, Individual Directors, Chairpersonsand the Managing Director for the year under review.

43Mastek Limited


In respect of individual Directors including the Non- Executive Chairman and the Managing Director, their personal performance was carried out using a peer review process, facilitated by an outside subject matter expert with confidential processing of inputs, interpretation of findings followed by one-on-one meeting of the individual Directors, and concluding with an aggregate presentation to the entire Board.

Board and Committees functioning was reviewed and evaluated on the basis of responses from Directors, Committee Members and the Managing Director to structured questionnaires, covering various aspects of the composition and functioning of the Board and its Committees.

In a separate meeting of the Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman were also evaluated, taking into account the views of Executive Director and Non- Executive Directors. The Directors were asked to provide their valuable feedback and suggestions about the overall functioning of the Board and its Committees and its areas of improvement for a higher degree of engagement with the Management.

The Board expressed its satisfaction with the Evaluation results, which reflects the high degree of engagement of the Board and its Committees with the Company and its Management. Based on the outcome of the evaluation and assessment cum feedback of the Directors, the Board and the Management have also agreed on some action points which will be implemented over an agreed time-frame.

B. Induction and familiarisation programme forDirectors

The details of the induction and familiarisationprogram for the Directors are given in the CorporateGovernance Report which forms part of theAnnual Report.

C. Independent Directors

Mr. S. Sandilya, Ms. Priti Rao, Mr. Atul Kanagatand Mr. Keith Bogg have been the IndependentDirectors on the Board of the Company as atMarch 31, 2018.

The Shareholders at the Extra Ordinary General Meeting held on March 05, 2015 had approved the appointment of Mr. S. Sandilya, Ms. Priti Rao and Mr. Atul Kanagat as Independent Directors of the Company for a term of four (4) years from April 01,

2015 to March 31, 2019 and Mr. Keith Bogg was appointed as an Independent Director for a period of 5 years with effect from January 17, 2017, and was confirmed by the shareholder at the 35th AGM of the Company held on June 22, 2017 as Non-Executive Independent Directors.

The Company has received and after due assessment took on record the necessary declarations from each of the Independent Directors under section 149(7) of the Companies Act, 2013, that they meets the criteria of Independence laid down in section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI Listing Regulations, and also in the opinion of the Board and as confirmed by these Directors, they fulfil the conditions specified in section 149 of the Companies Act, 2013 and the Rules made thereunder about their status as Independent Directors of the Company.

D. Director and Key Managerial Personnel (KMP):

There has been no change in the Board of Directorsand Key Managerial Personnel of your Companysince the last Annual General Meeting held on June22, 2017. Pursuant to the provisions of Section 2(51)and 203 of the Companies Act, 2013 read with theCompanies (Appointment and Remuneration ofManagerial Personnel) Rules, 2014, the following arethe Key Managerial Personnel of the Company:

• Mr.SudhakarRam-ViceChairman&ManagingDirector;

• Mr. Abhishek Singh - Group Chief FinancialOfficer; and

• Mr.DineshKalani-CompanySecretary.

During the year under review, Mr. Abhishek Singh was re-designated from Chief Financial Officer to Group Chief Financial officer w.e.f July 19, 2017

E. Retirement by Rotation:

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company,Mr. Ashank Desai retires by rotation at the forthcomingAnnual General Meeting and being eligible, offershimself for reappointment. Necessary resolution forapproval of re-appointment of Mr. Ashank Desai asa Director of the Company is included in the Noticeof the ensuing Annual General Meeting. The Boardrecommends the resolution for your approval.

F. Code of Conduct:

Mastek has formulated a Code of BusinessConduct and Ethics for Board of Directors and


Senior Managerial Personnel. The confirmation of compliance of the same is obtained from all concerned on an annual basis. All Board Members and Senior Managerial Personnel have given their confirmation of compliance for the year under review. A declaration duly signed by Vice Chairman & Managing Director is given under Corporate Governance Report appearing elsewhere as a separate section in this Annual Report. The Code of Business Conduct and Ethics for Board of Directors and Senior Managerial Personnel is also posted on the website of the Company at https://www.mastek.com/corporate-governance

19. COMPANY’S POLICY ON APPOINTMENT ANDREMUNERATION OF DIRECTORS AND SENIORMANAGERIAL PERSONNEL

The Company has a policy on Remuneration of Directorsand Senior Managerial Personnel. The policy has beenapproved by the Nomination & Remuneration Committeeand the Board. The policy is available at the website ofthe Company at https://www.mastek.com/corporate-governance

The policy inter-alia covers:

1. Directors’ appointment and remuneration; and

2. Remuneration of Key Managerial Personnel and othersenior employees.

Please refer the Notes to Accounts and Corporate Governance Section for the details on Remuneration of Directors and Key Managerial Personnel.

20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THEREGULATORS

During the year under review, no significant and materialorders were passed by the regulators or courts or tribunalsimpacting the going concern status and the Company’soperations.

21. INTERNAL FINANCIALS CONTROLS OVER FINANCIALSTATEMENT

A strong internal control system is pervasive in the Company. The Company has documented a robust and comprehensive internal control system for all the major processes to ensurereliability of financial reporting.

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the

prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The Company has a robust financial closure, certification mechanism for certifying adherence to various accounting policies, accounting hygiene and accuracy of provisions and other estimates.

22. INDIAN ACCOUNTING STANDARDS (IND AS)

Your Company has adopted Indian Accounting Standard(Ind AS) notified under the Companies (Indian AccountingStandards) Rules, 2015 with effect from April 01, 2017.Accordingly, these financial results along with thecomparatives have been prepared in accordance with therecognition and measurement principles stated therein,prescribed under Section 133 of the Companies Act, 2013read with the relevant rules issued thereunder and the otheraccounting principles generally accepted in India.

The Consolidated and Standalone Financial Statements have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016, as applicable. Please note that the Company has transitioned to Indian Accounting Standard (Ind AS) with effect from April 01, 2017. Accordingly, the impact of transition has been provided in the opening reserves as at April 01, 2016 and figures for the financial year ended March, 2017 have been restated accordingly. For all the periods upto the year ended March 31, 2017, the Company/Group had earlier prepared and presented its financial statements in accordance with Accounting Standards notified under section 133 of the Companies Act 2013 (Indian GAAP). These financial statements for the financial year ended March 31, 2018 are the first financial with comparatives, prepared under Ind AS. The adoption was carried out in accordance with Ind AS 101, First Time adoption of Indian Accounting Standards. The transition was carried out from Indian Accounting Principle generally accepted in India as prescribed under Section 133 of the Act read with the Rule 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP), which was the previous GAAP. Reconciliations and description of the effect of the transition to Ind AS from Indian GAAP is given in Note 33 of the Consolidated Financial Statement and Note 32 of the Standalone Financial Statement.

All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the consolidated/standalone financial statements under both Ind AS and Indian GAAP as of the Transition Date have been recognised directly in equity at the Transition Date. In preparing the financial statements, the Company

45Mastek Limited


has availed itself of certain exemptions and exceptions in accordance with Ind AS 101. Financial results for all the periods presented have been prepared in accordance with the recognition and measurement principles of IND AS 34, Interim Financial Reporting.

23. PUBLIC DEPOSITS

Your Company has not accepted any deposits frompublic in terms of Section 73 and/or 74 of the CompaniesAct, 2013.

24. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis comprising anoverview of the financial results, operations / performanceand the future prospects of the Company given elsewhereforms part of this Annual Report.

25. DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGO

(a) Conservation of energy and Technologyabsorption

The Company is entirely a Services Company andthus essentially, a non-energy intensive organisation.Additionally, the Company’s facilities are set up atlocations chosen for adequate availability and supplyof energy, regardless of power shortages recentlywitnessed across many markets.

Further, The Company was able to reduce thepower consumption by 18% over the previous year,through monitoring energy use and installing LEDlights. To further save energy and improve efficiency,we implemented smarter solutions with automatedcontrols to maintain optimal temperature at optimalpower consumption. LEDification of our offices aswell as replacement of old power guzzler with newsmarter solutions has helped to reduce energy costs aswell. The Company is studying the viability of a solarpowered energy / hot water solution for our cafeteria.The initiative is currently in the initial stage.

Company is also studying the viability of a solarpowered energy / hot water solution for the cafeteria.The initiative is currently in the initial stages.

(b) Foreign exchange earnings and outgo

Total Foreign Exchange used and earned by theCompany are given as follows:

` in Lakhs

Particulars Year Ended

March 31, 2018 Year Ended

March 31, 2017Exchange Used 490 795

Exchange Earned 16,026 12,749

26. CORPORATE GOVERNANCE

The Company has complied fully with CorporateGovernance requirements under the Companies Act,2013 and SEBI Listing Regulations. A separate section onCorporate Governance practices followed by the Companytogether with the Certificate from Mr. Prashant Mehta,Practicing Company Secretary, appearing elsewhere in thisreport, forms an integral part of this report.

27. CORPORATE SOCIAL RESPONSIBILITY

In compliance with the provisions of Section 135 ofthe Companies Act, 2013 the Board of Directors of theCompany have formed a Corporate Social Responsibility(CSR) Committee. The committee met two times during theyear and a detailed report about CSR activities undertakenduring the year is annexed as Annexure 7. Pursuant to therecommendation of the CSR Committee, the Board hasapproved a CSR Policy and the same has been uploaded onthe website of the Company www.mastek.com/corporate-governance. The contents of the policy are as follows:-

Mastek CSR programmes shall fall under the following categories:

1. Promoting education, enhancing skills of children, anddevelopment of children and women working in red-light areas. We are also involved in special educationand employment - enhancing vocation skills especiallyamong women, elderly and the differently abled, andlivelihood enhancement projects.

2. Eradicating hunger, poverty and malnutrition,promoting preventive health care and sanitation andmaking safe drinking water available.

3. Promoting gender equality and empowering women:Activities include setting up homes / hostels for women and orphans, old age homes and other such facilitiesfor senior citizens, day care centres, and measures toreduce inequalities faced by socially and economicallybackward groups.

4. Protection and up gradation of environmental conditions: These include ensuring environmental sustainability,ecological balance, protection of flora and fauna, animalwelfare, agro-forestry, conservation of natural resourcesand maintaining the quality of soil, air and water.

5. Any other projects with the approval of the Board.

Corpus:

The corpus of the CSR policy includes:

• 2%oftheaveragenetprofitoftheprecedingthreeyears

• Anyincomearisingtherefrom

• Surplusarisingoutoftheaboveactivities


• Payrollcontributionfromtheemployees

• Fund-raisingevents

Mastek may pool its resources and CSR spending with other groups or associate companies on collaborative efforts that qualify as CSR spending.

Roles and Responsibilities:

• DecideCSRprojectsorprogrammesoractivitiestobetaken up by the Company.

• PlacebeforetheBoard,theCSRactivitiesproposedtobe taken up by the Company for approval each year.

• Overseetheprogressoftheinitiativesrolledoutunderthis policy.

• Define and monitor the budgets for carrying outthe initiatives.

• SubmitareporttotheBoardofDirectorsonallCSRactivities/projects spent during the financial year.

• Monitor and review the implementation of theCSR policy.

CSR Committee Composition:

The Chairperson of the Committee is Ms. Priti Rao, an Independent director. The other members are, Mr. Sudhakar Ram and Mr. Ashank Desai. The Company Secretary Act as the Secretary to the Committee.

During the financial year ended March 31, 2018 the Board approved a Budget of ` 84 lakhs. Based on the Average net profit of the Company for three immediately preceding financial years, the amount to be spent on CSR activities during the financial year 2017-18 was budgeted at ` 83.94 lakhs. A total sum of ` 84 lakhs was spent on Projects approved under Section 135 of the Companies Act, 2013 on CSR activities during the year.

The said expenditure is within the prescribed parameters and the Company is in compliance of the provisions of Section 135 of the Companies Act, 2013.

28. TRANSFER OF UNCLAIMED DIVIDEND AMOUNTS TOINVESTOR EDUCATION AND PROTECTION FUND

Your Company has transferred a sum ` 1,68,805/- ofFinal Dividend for the year 2009-10 during the financialyear 2017-18 to Investor Education and ProtectionFund (IEPF), established by Central Government incompliance with section 125 of the Companies Act,2013. The said amounts represent unclaimed Dividendswhich were lying with the Company for a consecutiveperiod of 7 (seven) years from their respective duedates of initial payment.

Pursuant to the provisions of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has already filed the necessary form and uploaded the details of unpaid / unclaimed amounts lying with the Company, as on the date of last Annual General Meeting (i.e. June 22, 2017), and with the Ministry of Corporate Affairs website.

TRANSFER OF CONCERNED EQUITY SHARES TO INVESTOR EDUCATION AND PROTECTION FUND AUTHORITY (IEPF AUTHORITY)

Pursuant to the provisions of Section 124 and 125 of the Companies Act and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, and amendments made thereunder all the concerned shares in respect of which dividend had not been claimed or remained unpaid for seven consecutive years or more had been transferred by the Company in the name of Investor Education and Protection Fund Authority (“IEPF Authority”) in their Demat Account in November, 2017 and January, 2018.

The Company had identified and initiated the share transfer process with Depositories and transferred 48,285 shares in November, 2017 and 7,033 shares in January, 2018 (due to be transferred to IEPF based on Un-Paid Interim Dividend of year 2009-10 and Un-Paid Final Dividend of year 2009-10 in November 2017 and January, 2018 respectively) to Investor Education and Protection Fund Authority Demat Account to comply with the said Rules. The List of shares transferred to IEPF Authority is available on the Company’s website at https://www.mastek.com/investor-information

In case the shareholders have any queries on the subject matter and the Rules, they may contact the Company’s Share Transfer Agent, Karvy Computershare Private Limited. The Members / claimants whose shares, unclaimed dividend, etc. have been transferred to IEPF may claim their shares and unclaimed dividend or apply for refund by making an application to IEPF Authority in IEPF Form-5 (available on www.iepf.gov.in). The Member / claimant can file only one consolidated claim in a financial year as per the IEPF Rules. It is in the Members interest to claim any un-encashed dividends from IEPF and for future, to consider dematerialisation of their shares and opt for Automated Clearing House (ACH) mode with the Company, so that dividends paid by the Company are credited to the investor’s account on time.

29. DISCLOSURE AS PER SEXUAL HARASSMENT OFWOMEN AT WORKPLACE (PREVENTION, PROHIBITIONAND REDRESSAL) ACT, 2013:

Mastek has zero tolerance towards any action on thepart of any employee which may fall under the ambit of

47Mastek Limited


‘Sexual Harassment’ at workplace, and is fully committed to uphold and maintain the dignity of every women employee working in the Company. The Company’s Policy provides for protection against sexual harassment of women employees at workplace and for prevention and redressal of such complaints.

The Company has a qualified Internal Committee, who along with the external member review the policy and framework on a regular basis. Additionally the company ensures that every new employee undergoes an awareness program which will sensitise them to uphold the dignity of their colleagues at workplace, particularly with respect to prevention of sexual harassment. During the year, no such case was reported.

30. ACKNOWLEDGEMENT

Your Directors are grateful to the Investors for theircontinued patronage and confidence in the Company. YourDirectors also thank the Central and State Governments,other statutory and regulatory authorities for theircontinued support.

Your Directors thank all our esteemed clients for the faith and trust reposed in the Company. With continuous learning, skill up-gradation and technology development

Company will continue to provide world class professionalism and services to its clients.

Your Directors wish to thank all associates, vendors and contractors within the country and abroad, for their continued support without which Mastek could not have achieved the desired results.

Your Directors also wish to convey their appreciation to all employees at all levels for the valuable services and co-operation extended by them and are confident that they will continue to contribute their best towards achieving still better performance in future.

For and on behalf of the Board

Sudhakar Ram S. SandilyaVice Chairman & Non-Executive Chairman Managing Director and Independent Director

Date : April 18, 2018Place : Mumbai


Pursuant to sub-section (3) of section 129 of the Act, the brief business and a statement containing the salient features of the financial statements of the Company’s subsidiaries and joint venture are given below.

Trans American Information Systems Private Limited, India, a Wholly Owned Subsidiary of Mastek Limited is a Company with deep routed capability in providing high skilled resources and end-to-end e-commerce services including strategy, creative design, implementation and managed services. Having presence in India and supporting US Customers.

Mastek (UK) Limited, a Wholly Owned Subsidiary of Mastek Limited, is a provider of Software Solutions which enable customers to solve their complex, mission critical business problems with innovative solutions that sustain and grow their business in the UK market.

IndigoBlue Consulting Limited, a Wholly Owned Subsidiary of Mastek (UK) Limited, is a leading UK consultancy organisation specializing in Agile programme and project management.

Digility Inc., USA, a Wholly Owned Subsidiary of Mastek (UK) Limited, is a niche digital transformation services provider, which uses agile methodologies to service customers in the financial and retail sectors through the Agile Development, Data Warehouse, Business Intelligence and Testing Services DNA.

TAISTech LLC, USA and Trans American Information Systems Inc. (TAIS Inc.) USA are the Wholly Owned Subsidiary of Digility Inc., USA. TAIS Inc. is a global digital services firm focused on implementing and maintaining the Oracle Commerce and Oracle Commerce Cloud applications, as well as integrating them with the full suite of Oracle Customer Experience Products.

Enterprises where control exists • Mastek (UK) Limited- Wholly Owned Subsidiary (WOS) of Mastek Limited• IndigoBlue Consulting Limited- WOS of Mastek (UK) Limited• Digility Inc.- WOS of Mastek (UK) Limited• TAISTech LLC, USA -WOS of Digility Inc.• Trans American Information Systems Inc. USA-WOS of Digility Inc.• Trans American Information Systems Private Limited-WOS of Mastek Limited

HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARIES AND THEIR CONTRIBUTION TO OVERALL PERFORMANCE OF THE COMPANY Part “A”: Subsidiaries

(` in Lakhs)

Name of Subsidiaries

Trans American Information

Systems Private Limited

Mastek (UK)

Limited

IndigoBlue Consulting

LimitedDigility Inc.

TAISTech LLC, USA

Trans American Information Systems Inc.

USAReporting period for the subsidiary concerned, if different from holding company’s reporting period

Reporting period of all the Subsidiaries are the same as of the Holding Company which is March 31

The Date since when subsidiary was acquired 23-Dec-2016 1-Oct-2001 1-May-2015 17-Nov-2015 23-Dec-2016 23-Dec-2016Reporting Currency INR GBP GBP USD USD USDExchange Rate (in INR) on the last date of the Financial Year in the case of foreign subsidiaries

NA 92 92 65 65 65

Share Capital 3 185 9 3,650 - 3Reserves & Surplus 1,087 34,339 149 (1,341) 828 3,332Total Assets 1,316 45,316 1,250 14,816 3,953 4,086Total Liabilities 226 10,792 1,092 12,507 3,125 751Investments - 25,336 - 8,352 - -Turnover 3,398 57,300 5,746 1,561 15,674 13,265Profit Before Tax 492 8,592 (177) (2,063) 1,871 (149)Taxation 151 1,639 16 (508) 550 (66)Profit After Tax 341 6,953 (161) (1,554) 1,321 (82)Proposed Dividend - - - - - -% of Shareholding 100% 100% 100% 100% 100% 100%% of Consolidated Profit including group transactions

4.9% 76.2% (2.1%) (29.0%) 26.5% (1.8%)

Notes:1. Names of subsidiaries which are yet to commence operations: NA2. Names of subsidiaries which have been liquidated or sold during the year- NA

ANNEXURE 1FORM AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Statement containing salient features of the financial statement of subsidiaries/associate companies/ joint ventures

49Mastek Limited


Part “B”: Associates and Joint Venture:

The Company does not have any Associates and/or Joint Venture Company during the year.

Notes:

1. Names of associates or joint ventures which are yet to commence operations - NA

2. Namesofassociatesorjointventureswhichhavebeenliquidatedorsoldduringtheyear–NA


Sudhakar Ram S. SandilyaVice Chairman & Managing Director Non-Executive Chairman and Independent Director

Abhishek Singh Dinesh KalaniGroup Chief Financial Officer Company Secretary



ANNEXURE 2FORM MGT-9

EXTRACT OF ANNUAL RETURN[Pursuant to Section 92 (1) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

1. CIN L74140GJ1982PLC0052152. Registration Date May 14, 19823. Name of the Company MASTEK LIMITED4. Category / Sub-Category of the Company Public Company Limited by Shares5. Address of the Registered Office and

contact details804/805, President House, Opp. C. N. Vidyalaya, Nr. Ambawadi Circle, Ahmedabad - 380006 Tel No. +91 79 2656 4337

6. Whether listed company Yes7. Name, Address and contact details of

Registrar & Transfer Agents (RTA)Karvy Computershare Private LimitedKarvy Selenium, Tower B, Plot No. 31-32, Gachibowli,Financial District, Nanakramguda,SerilingampallyMandal,Hyderabad–500032.Tel. : +91-040-6716-2222; Fax : +91-040-2342-0814E-mail: [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

Sr. No.

Name and Description of main products / servicesNIC Code of the Product/

service% to total turnover of the

company1. Computer Programming, Consultancy and Related

Activities620 100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -

All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

Sr. No.

Name and Address of the Company CIN/GLNHolding/

Subsidiary/ Associate

% of shares

held

Applicable Section

1. Trans American Information Systems Private LimitedAddress: 315, World Trade Centre, Babar Road, BarakhambaAvenue, Connaught Place, New Delhi - 110 001

U51505DL1999PTC098689 Subsidiary 100.00% 2(87)

2 Mastek (UK) LimitedAddress: Pennant House, 2 Napier Court, Napier RoadReading, RG1 8BW, UK

Foreign Company Subsidiary 100.00% 2(87)

3 IndigoBlue Consulting LimitedAddress: Ormond House, 3 Duke of York St, London SW1Y 6JP, United Kingdom

Foreign Company Step down Subsidiary

100.00% 2(87)

4 Digility Inc.Address: 15601 Dallas Parkway, Suite 250, Addison, TX 75001


100.00% 2(87)

5 TAISTech LLC, USAAddress: 15601 Dallas Parkway, Suite 250, Addison, TX 75001


100.00% 2(87)

6 Trans American Information Systems Inc. USAAddress: 860 Hebron Pkwy, Suite 701, Lewisville, TX 75057, USA


100.00% 2(87)

51Mastek Limited


IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

(i) Category-wise Share Holding

Category of Shareholders

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year % Change

during the yearDemat Physical Total % of Total

SharesDemat Physical Total % of Total

SharesA. Promoters(1) Indiana. Individual/ HUF 1,15,06,660 NIL 1,15,06,660 49.22 1,01,53,660 NIL 1,01,53,660 42.86 (6.36)b. Central Govt. NIL NIL NIL NIL NIL NIL NIL NIL NILc. State Govt. (s) NIL NIL NIL NIL NIL NIL NIL NIL NILd. Bodies Corp NIL NIL NIL NIL NIL NIL NIL NIL NILe. Banks / FI NIL NIL NIL NIL NIL NIL NIL NIL NILf. Any Other

Ram Family Trust I acting in capacity as trustee to Girija Ram)

NIL NIL NIL NIL 10,00,000 NIL 10,00,000 4.22 4.22

Sub-total (A) 1,15,06,660 NIL 1,15,06,660 49.22 1,11,53,660 NIL 1,11,53,660 47.08 (2.14)(2) Foreigna. NRIs Individuals NIL NIL NIL NIL NIL NIL NIL NIL NILb. Other–Individuals NIL NIL NIL NIL NIL NIL NIL NIL NILc. Bodies Corp. NIL NIL NIL NIL NIL NIL NIL NIL NILd. Banks / FI NIL NIL NIL NIL NIL NIL NIL NIL NILe. Any Other NIL NIL NIL NIL NIL NIL NIL NIL NIL

Sub-total(A) (2):- NIL NIL NIL NIL NIL NIL NIL NIL NILTotal shareholding of Promoter (A) = (A)(1)+(A)(2)

1,15,06,660 NIL 1,15,06,660 49.22 1,11,53,660 NIL 1,11,53,660 47.08 (2.14)

B. Public Shareholding1. Institutionsa. Mutual Funds 7,93,470 1,200 7,94,670 3.40 11,94,881 NIL 11,94,881 5.04 1.64b. Banks / FI 18,060 NIL 18,060 0.08 82,355 NIL 82,355 0.35 0.27c. Central Govt NIL NIL NIL NIL NIL NIL NIL NIL NILd. State Govt (s) NIL NIL NIL NIL NIL NIL NIL NIL NILe. Venture Capital Funds NIL NIL NIL NIL NIL NIL NIL NIL NILf. Insurance Companies 11,21,532 NIL 11,21,532 4.80 NIL NIL NIL NIL (4.80)g. FIIs 17,42,580 1,600 17,44,180 7.46 25,96,701 400 25,97,101 10.96 3.5h. Foreign Venture Capital

FundsNIL NIL NIL NIL NIL NIL NIL NIL NIL

i. Others (specify) NIL NIL NIL NIL NIL NIL NIL NIL NILSub-Total (B)(1) 36,75,642 2,800 36,78,442 15.73 38,73,937 400 38,74,337 16.35 0.61

2. Non-Institutionsa. Bodies Corporate

i. Indian 10,86,197 2,400 10,88,597 4.66 17,92,724 1,600 17,94,324 7.57 2.91ii. Overseas NIL 200 200 0.00 NIL 200 200 0.00 0.00

b. Individualsi. Individual shareholders

holding nominal sharecapital upto ` 2 lakh

55,34,387 1,98,933 57,33,320 24.52 47,40,027 1,46,114 48,86,141 20.62 (3.90)

ii. Individual shareholders holding nominal share capital in excess of ` 2 lakh

6,95,033 NIL 6,95,033 2.97 15,19,559 NIL 15,19,559 6.41 3.44

c. Othersi. Non Resident Individuals 5,58,196 13,273 5,71,469 2.44 2,37,210 10,639 2,47,849 1.05 (1.39)ii. Foreign National 40,035 NIL 40,035 0.17 61,279 NIL 61,279 0.26 0.09iii. NBFCs registered with RBI 623 NIL 623 0.003 4,817 NIL 4,817 0.02 0.02iv. Trust 8,890 NIL 8,890 0.04 6,753 NIL 6,753 0.03 (0.01)v. Clearing Members 54,264 NIL 54,264 0.23 87,819 NIL 87,819 0.37 0.14vi. IEPF NIL NIL NIL NIL 55,318 NIL 55,318 0.23 0.23Sub-total (B)(2):- 79,77,625 2,14,806 81,92,431 35.04 85,05,506 1,58,553 86,64,059 36.57 1.53Total Public Shareholding (B)=(B)(1)+(B)(2)

1,16,53,267 2.17,606 1,18,70,873 50.78 1,23,79,443 1,58,953 1,25,38,396 52.92 2.14

C. Shares held by Custodian for GDRs &ADRs

NIL NIL NIL NIL NIL NIL NIL NIL NIL

Grand Total (A+B+C) 2,31,59,927 2,17,606 2,33,77,533 100.00 2,35,33,103 1,58,953 2,36,92,056 100.00 0.00


(ii) Shareholding of Promoters

Sr No.

Shareholder’s Name

Shareholding at the beginning of the year

Shareholding at the end of the year

% change

in share holding during

the year

No. of Shares

% of total Shares of the

company

%of Shares Pledged /

encumbered to total shares

No. of Shares

% of total Shares of the

company

% of Shares Pledged /

encumbered to total shares

1. Ashank Desai 30,99,552 13.26 NIL 30,99,552 13.08 NIL (0.18)2. Sudhakar Ram 27,91,680 11.94 NIL 15,88,680 6.71 NIL (5.23)3. Ketan Mehta 25,19,100 10.78 NIL 23,99,100 10.13 NIL (0.65)4. Radhakrishnan Sundar 14,45,800 6.18 NIL 14,15,800 5.98 NIL (0.20)5. Avanthi Desai 81,600 0.35 NIL 81,600 0.34 NIL (0.01)6. Chinmay Ashank Desai 71,600 0.31 NIL 71,600 0.30 NIL (0.01)7. Padma Desai 1,55,200 0.66 NIL 1,55,200 0.66 NIL 0.008. Girija Ram 1,63,600 0.70 NIL 1,63,600 0.69 NIL (0.01)9. Samvitha Ram 1,03,328 0.44 NIL 1,03,328 0.44 NIL 0.0010. Ram Family Trust I acting

in capacity as trustee to Girija Ram)

NIL NIL NIL 10,00,000 4.22 NIL 4.22

11. Rupa Mehta 4,80,800 2.06 NIL 4,80,800 2.03 NIL (0.03)12. Tanay Mehta 6,400 0.03 NIL 6,400 0.03 NIL 0.0013. Usha Sundar 4,60,000 1.97 NIL 4,60,000 1.94 NIL (0.03)14. Varun Sundar 64,000 0.27 NIL 64,000 0.27 NIL 0.0015 Shankar Sundar 64,000 0.27 NIL 64,000 0.27 NIL 0.00

Total 1,15,06,660 49.22 NIL 1,11,53,660 47.08 NIL (2.14)

(iv) Shareholding Pattern of top ten Shareholders as on March 31, 2018 (other than Directors, Promoters and Holders ofGDRs and ADRs):

Sr No.

For each of the Top 10 shareholders

Date Reason


Cumulative Shareholding during the year

No. of shares

% of total shares

No. of shares

% of total shares

1 KIFS TRADE CAPITAL PRIVATE LIMITED

At the beginning of the year 01/04/2017 0 0.00

Changes during the year 21/07/2017 Purchase 1,00,000 0.43 1,00,000 0.43

04/08/2017 Sale (1,00,000) (0.43) 0 0.00

18/08/2017 Purchase 1,00,000 0.43 1,00,000 0.43

25/08/2017 Purchase 1,00,000 0.43 2,00,000 0.85

22/09/2017 Sale (1,68,000) (0.71) 32,000 0.14

29/09/2017 Sale (32,000) (0.14) - -

20/10/2017 Purchase 2,81,337 1.20 2,81,337 1.20

10/11/2017 Sale (2,81,337) (1.19) - -

24/11/2017 Purchase 17,250 0.07 17,250 0.07

15/12/2017 Purchase 1,36,873 0.58 1,54,123 0.65

02/02/2018 Sale (27,000) (0.11) 1,27,123 0.54

09/03/2018 Purchase 2,64,877 1.12 3,92,000 1.66

16/03/2018 Sale (3,53,000) (1.49) 39,000 0.16

30/03/2018 Purchase 3,53,000 1.49 3,92,000 1.65

At the end of the year 31/03/2018 3,92,000 1.65

53Mastek Limited


Sr No.


Date Reason



No. of shares

% of total shares

No. of shares

% of total shares

2 IDFC CLASSIC EQUITY FUND

At the beginning of the year 01/04/2017 3,61,188 1.55

Changes during the year 07/04/2017 Purchase 61,718 0.26 4,22,906 1.81

28/04/2017 Sale (22,906) (0.10) 4,00,000 1.71

05/05/2017 Sale (10,000) (0.04) 3,90,000 1.67

12/05/2017 Sale (6,116) (0.03) 3,83,884 1.64

09/06/2017 Sale (19,884) (0.09) 3,64,000 1.56

21/07/2017 Sale (61,500) (0.26) 3,02,500 1.29

11/08/2017 Purchase 91,054 0.39 393,554 1.67

18/08/2017 Purchase 19,736 0.08 4,13,290 1.76

29/09/2017 Purchase 2,791 0.01 4,16,081 1.77

06/10/2017 Purchase 10,000 0.04 4,26,081 1.81

31/10/2017 Purchase 7,500 0.03 4,33,581 1.84

10/11/2017 Sale (1,283) (0.01) 4,32,298 1.83

17/11/2017 Sale (1,49,380) (0.63) 2,82,918 1.20

24/11/2017 Sale (1,701) (0.01) 2,81,217 1.19

08/12/2017 Sale (21,217) (0.09) 2,60,000 1.10

26/01/2018 Purchase 5,877 0.02 2,65,877 1.12

02/03/2018 Purchase 24,123 0.10 2,90,000 1.23

09/03/2018 Purchase 40,000 0.17 3,30,000 1.40

16/03/2018 Sale (17,984) (0.08) 3,12,016 1.32


3 IDFC TAX ADVANTAGE (ELSS) FUND

At the beginning of the year 01/04/2017 270,000 1.15


05/05/2017 Sale (20,000) (0.09) 2,65,000 1.13

09/06/2017 Sale (25,000) (0.11) 2,40,000 1.03

07/07/2017 Sale (15,000) (0.06) 2,25,000 0.96

21/07/2017 Sale (4,149) (0.02) 2,20,851 0.94

11/08/2017 Purchase 19,149 0.08 2,40,000 1.02

31/10/2017 Purchase 10,000 0.04 2,50,000 1.06

05/01/2018 Purchase 20,000 0.08 2,70,000 1.14

26/01/2018 Purchase 30,000 0.13 3,00,000 1.27

09/02/2018 Purchase 10,000 0.04 3,10,000 1.31


4 GLOBEFLEX EMERGING MARKETS SMALL CAP, L.P.

At the beginning of the year 01/04/2017 126,800 0.54


12/05/2017 Purchase 45,528 0.19 2,57,400 1.10

06/10/2017 Purchase 35,430 0.15 2,92,830 1.25

13/10/2017 Purchase 32,770 0.14 3,25,600 1.39

01/12/2017 Sale (29,600) (0.13) 2,96,000 1.25



Sr No.


Date Reason



No. of shares

% of total shares

No. of shares

% of total shares

5 LSV EMERGING MARKETS SMALL CAP EQUITY FUND, LP


Changes during the year 24/11/2017 Purchase 31,959 0.14 31,959 0.14

01/12/2017 Purchase 9,318 0.04 41,277 0.17

08/12/2017 Purchase 36,734 0.16 78,011 0.33

15/12/2017 Purchase 65,755 0.28 1,43,766 .61

22/12/2017 Purchase 42,021 0.18 1,85,787 0.79

29/12/2017 Purchase 5,589 0.02 1,91,376 0.81

05/01/2018 Purchase 9,600 0.04 2,00,976 0.85

12/01/2018 Purchase 34,724 0.15 2,35,700 1.00


6 SACHIN KASERA


Changes during the year 04/08/2017 Purchase 24,819 0.11 24,819 0.11

11/08/2017 Purchase 25,181 0.11 50,000 0.21

18/08/2017 Purchase 17,564 0.08 67,564 0.29

25/08/2017 Purchase 7,436 0.03 75,000 0.32

31/10/2017 Purchase 25,633 0.11 1,00,633 0.43

10/11/2017 Purchase 24,367 0.10 1,25,000 0.53

19/01/2018 Purchase 1,00,000 0.43 2,25,000 0.95

At the end of the year 31/03/2018 2,25,000 0.957 SURESH BHATIA

At the beginning of the year 01/04/2017 0 0.00Changes during the year 28/04/2017 Purchase 58,210 0.25 58,210 0.25

26/05/2017 Purchase 15,000 0.06 73,210 0.3128/07/2017 Purchase 31,790 0.14 1,05,000 0.4501/09/2017 Purchase 45,000 0.19 1,50,000 0.6408/09/2017 Sale (10,000) (0.04) 1,40,000 0.6022/09/2017 Sale (8,000) (0.03) 1,32,000 0.5620/10/2017 Purchase 10,000 0.04 1,42,000 0.6017/11/2017 Purchase 50,000 0.21 1,92,000 0.8115/12/2017 Purchase 932 0.00 1,92,932 0.8229/12/2017 Purchase 14,068 0.06 2,07,000 0.88

At the end of the year 31/03/2018 2,07,000 0.878 GOVERNMENT OF THE PROVINCE OF ALBERTA MANAGED BY C

At the beginning of the year 01/04/2017 0 0.00Changes during the year 24/11/2017 Purchase 25,300 0.11 25,300 0.11

01/12/2017 Purchase 7,300 0.03 32,600 0.1408/12/2017 Purchase 28,900 0.12 61,500 0.2615/12/2017 Purchase 52,200 0.22 1,13,700 0.4822/12/2017 Purchase 33,200 0.14 1,46,900 0.6229/12/2017 Purchase 4,400 0.02 1,51,300 0.6405/01/2018 Purchase 7,700 0.03 1,59,000 0.6712/01/2018 Purchase 27,900 0.12 1,86,900 0.79


55Mastek Limited


Sr No.


Date Reason



No. of shares

% of total shares

No. of shares

% of total shares

9 AMPERSAND GROWTH OPPORTUNITIES FUND SCHEME- IAt the beginning of the year 01/04/2017 0 0.00Changes during the year 02/02/2018 Purchase 20,000 0.08 20,000 0.08

09/02/2018 Purchase 1,08,000 0.46 1,28,000 0.5416/02/2018 Purchase 22,000 0.09 1,50,000 0.6309/03/2018 Purchase 10,000 0.04 1,60,000 0.6816/03/2018 Purchase 10,000 0.04 1,70,000 0.7230/03/2018 Purchase 5,000 0.02 1,75,000 0.74

At the end of the year 31/03/2018 1,75,000 0.7410 IDFC BALANCED FUND

At the beginning of the year 01/04/2017 114,344 0.49Changes during the year 07/04/2017 Purchase 3,214 0.01 1,17,558 0.50

12/05/2017 Sale (1,17,558) (0.50) 0 0.0019/05/2017 Purchase 1,17,558 0.50 1,17,558 0.5021/07/2017 Sale (11,558) (0.05) 1,06,000 0.4511/08/2017 Purchase 8,178 0.03 1,14,178 0.4918/08/2017 Purchase 11,678 0.05 1,25,856 0.5425/08/2017 Purchase 12,144 0.05 1,38,000 0.5929/09/2017 Purchase 1,486 0.01 1,39,486 0.5906/10/2017 Purchase 26,000 0.11 1,65,486 0.7031/10/2017 Purchase 7,500 0.03 1,72,986 0.7424/11/2017 Sale (528) (0.00) 1,72,458 0.7302/03/2018 Sale (12,458) (0.05) 1,60,000 0.6816/03/2018 Sale (2,535) (0.01) 1,57,465 0.66


(v) Shareholding of Directors and Key Managerial Personnel:

Sr No.

For Each of the Directors and KMP

Shareholding at the beginning of the year April 01, 2017

Shareholding at the end of the year March 31, 2018

No. of shares

% of total shares of the

company

No. of shares

% of total shares of the

company

1. Mr. Sudhakar Ram 27,91,680 11.94 15,88,680 6.71

2. Mr. Ashank Desai 30,99,552 13.26 30,99,552 13.08

3. Mr. S. Sandilya 26,000 0.11 26,000 0.11

4. Mr. Atul Kanagat* NIL NA NIL NA

5. Ms. Priti Rao 29,600 0.13 29,600 0.12

6. Mr. Keith Bogg NIL NA NIL NA

7. Mr. Abhishek Singh (Group Chief Financial Officer) 8,927 0.04 15,929 0.07

8. Mr. Dinesh Kalani (Company Secretary) NIL NA NIL NA

* Mr. Atul Kanagat was holding 24,600 Employee Stock Options which since exercised and converted into equity shares onApril 17, 2018.


V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

Secured Loans excluding deposits

`

Unsecured Loans

`

Deposits`

Total Indebtedness

`

Indebtedness at the beginning of the financial year April 01, 2017

i) Principal Amount 66,10,249 NA NA 66,10,249

ii) Interest due but not paid NA NA NA NA

iii) Interest accrued but not due NA NA NA NA

Total (i+ii+iii) 66,10,249 NA NA 66,10,249

Change in Indebtedness during the year

+ Addition 76,27,378 NA NA 76,27,378

- Reduction (51,45,700) NA NA (51,45,700)

Net Change 24,81,678 NA NA 24,81,678

Indebtedness at the end of the financial year March 31, 2018

i) Principal Amount 90,91,927 NA NA 90,91,927

ii) Interest due but not paid NA NA NA NA

iii) Interest accrued but not due NA NA NA NA

Total (i+ii+iii) 90,91,927 NA NA 90,91,927

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration of Managing Director, Whole-time Directors and/or Manager:

Sr. No.

Particulars of Remuneration

Name of MD/WTD/Manager

Mr. Sudhakar Ram(all figures in `)

1. Gross salary(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 7,036,800 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 39,600(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961. NIL

2. Stock Option NIL3. Sweat Equity NIL4. - Commission

- as % of profit- others, specify

NIL

5. Others, please specifyContribution to Provident Fund & Other Fund 8,44,416 Performance Bonus* 15,00,000 Total 94,20,816Ceiling as per the Act 5% of the Net Profits

of the Company

* Performance Bonus/ Award of ` 15 Lacs for the financial year 2017-18 will be paid in financial year 2018-19 and the provision for the same has beenmade in the accounts under review.

Note: Performance Bonus of `19 Lacs for the Financial Year 2016-17 which was recommended subsequent to the finalisation of previous year annual accounts was paid to Mr. Sudhakar Ram in the current financial year for which the provision for the payment of performance bonus was already made in the previous financial year 2016-17 but paid in the current financial year under review, hence not included in current year remuneration and it was within the overall ceiling limit of Previous Year.

57Mastek Limited


B. Remuneration to other directors:a) Independent Directors -

Particulars of Remuneration(all figures in `)

Name of Directors Total AmountMr. S.

SandilyaMr. Atul Kanagat

Ms. Priti Rao Mr. Keith Bogg

Fee for Attending Board meetings and Committee Meetings

16,50,000 14,00,000 14,00,000 13,00,000 57,50,000

Commission* 13,50,000 6,00,000 6,00,000 NIL 25,50,000Others NIL NIL NIL NIL NILTotal 30,00,000 20,00,000 20,00,000 13,00,000 83,00,000Overall Ceiling as per the Act 1% of the Net Profits of the Company

*Commission for financial year 2017-18 will be paid in financial year 2018-19 and the Provision for the same has been made in the accountsunder review.

b) Non-Executive Director -

Particulars of RemunerationName of Director

Mr. Ashank Desai(all figures in `)

Fee for Attending Board meetings and Committee Meetings 21,50,000 Commission NILOthers (perquisites /benefits)* 61,965Total 22,11,965Overall Ceiling as per the Act 1% of the Net Profits

of the Company

* Approved by the Shareholders earlier under enabling resolution.

C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD

(all figures in `)

Sr No.

Particulars of Remuneration

Key Managerial Personnel (KMP)

Mr. Abhishek Singh(Group Chief

Financial Officer)

Mr. Dinesh Kalani(Company Secretary)

Total

1. Gross salary(a) Salary as per provisions contained in section 17(1) of the

Income-tax Act, 1961.1,01,42,140 32,08,434 1,33,50,574

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 NIL NIL NIL(c) Profits in lieu of salary under section 17(3) Income-tax

Act, 1961.NIL NIL NIL

2 Stock Option 6,88,437 NIL 6,88,437 3 Sweat Equity NIL NIL NIL4 Commission

- as % of profit- others, specify…

NIL NIL NIL

5 Others, please specifyContribution to Provident Fund & Other Fund 6,88,816 1,09,776 7,98,592Performance Bonus* 17,38,081 1,96,039 19,34,120Total 1,32,57,474 35,14,249 1,67,71,723

*Performance Bonus for financial year 2017-18 will be paid in financial year 2018-19 and the Provision for the same has been madein the accounts under review.

VII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES:

There were no penalties, punishments or compounding of offences during the year ended March 31, 2018.


ANNEXURE 3FORM AOC – 2

[Pursuant to Clause (4) of sub-section (3) of Section 134 of the Companies Act, 2013 and Rule 8 (2) of the Companies (Accounts) Rules, 2014]

A. Company has not entered into any material contracts or arrangements or transactions which are not on arm’s length basis.

B. Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred toin sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under thirdproviso thereto

1. Details of material contracts or arrangement or transactions not at arm’s length basis:- There were no contracts orarrangements or transactions entered into during the year ended March 31, 2018, which are not at arm’s length basis.

2. Details of material contracts or arrangement or transactions at arm’s length basis:

The details of material contracts or arrangement or transactions at arm’s length basis for the year ended March 31, 2018 are as follows:

Name(s) of the related party

Nature of relationship

Nature of contracts/

arrangements/transactions

Duration of the contracts / arrangements/

Transactions

Salient terms of the contracts or arrangements or

transactions including the value, if any

Date(s) of approval/

renewal by the Board, if

any

Amount paid as advances,

if any

Mastek (UK) Ltd

Wholly-owned subsidiary

1. IT & relatedservicesContracts(MSA) and

1. IT & related servicescontracts are for durationof one year and areautomatically renewedannually.

As per Transfer Pricing guidelines

18-04-2018 -

2. Trade MarkLicenseagreement

2. For a period of 5 years witheffect from April 01, 2016

Trans American Information Systems Private Limited

Wholly-owned subsidiary

Leave & License Agreement

Leave and License Agreementfor a period from January 01, 2018 to June 09, 2018

As per Related Party Transaction

18-01-2018 Security Deposit of ` 25,000/-

Leave and License Agreementfor a period of 11 monthseffective from February 1, 2017 till December 31, 2017


20-04-2017 Security Deposit of ` 25,000/-

Cashless Technologies India Pvt Ltd

Entity controlled by a Director

IT & related services Contracts (MSA) and

IT & related services contracts are for duration of one year and are automatically renewed annually.


18-04-2018 -

Note:1. All the above reported transactions has been executed at Arm’s Length Pricing Basis and are in the Ordinary Course of Business.2. Necessary approval of the Audit Committee and the Board (Omnibus and Specific) has been obtained prior to entering into all

the Related Party Transactions.


Sudhakar Ram S. SandilyaVice Chairman & Managing Director Non- Executive Chairman and Independent Director

Date :April 18, 2018Place : Mumbai

59Mastek Limited


ANNEXURE 4SECRETARIAL AUDIT REPORT

FORM MR-3[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

For the Financial Year ended March 31, 2018

To, The Members, Mastek LimitedCIN: L74140GJ1982PLC005215

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practice by Mastek Limited (hereinafter called the “Company”). Secretarial Audit as required under Companies Act, 2013 was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has during the audit period covering the Financial Year ended on March 31, 2018 (“Audit Period”) complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the Financial Year ended March 31, 2018 as made available to us, according to the following provisions including any statutory modification, amendments or re-enactment thereof for the time being in force:

(i) The Companies Act, 2013 (the Act) and the rules madethereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’)and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rulesand regulations made thereunder to the extent of ForeignDirect Investment, Overseas Direct Investment and ExternalCommercial Borrowings as applicable to the Company;

(v) The following Regulations and Guidelines prescribed underthe Securities and Exchange Board of India Act, 1992(‘SEBI Act’):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

(c) The Securities and Exchange Board of India (Issue ofCapital and Disclosure Requirements) Regulations,2009 and amendments from time to time;

(d) The Securities and Exchange Board of India (EmployeeStock Option Scheme and Employee Stock PurchaseScheme) Guidelines, 1999/ Securities and ExchangeBoard of India (Share Based Employee Benefits)Regulations, 2014;

(e) The Securities and Exchange Board of India (Registrarsto an Issue and Share Transfer Agents) Regulations1993 regarding Companies Act and dealing with theClient.

We have relied on the representation made by the Company and its officers for systems and mechanism formed by the Company and having regard to the compliance system prevailing in the Company and on examination of the relevant documents and records in pursuance thereof, on test-check basis, the Company has complied with the following laws applicable specifically to the Company:

a. The Information Technology Act, 2000;

b. The Special Economic Zone Act, 2005;

c. Policy relating to Software Technology Parks of Indiaand its regulations;

d. The Trade Marks Act, 1999;

e. Indian Stamp Act, 1999;

f. Negotiable Instruments Act,1881;

g. Registration Act, 1908;


h. All applicable Labour Laws and other incidental lawsrelated to labour and employees appointed by theCompany either on its payroll or on contractual basisas related to wages, gratuity, provident fund, ESIC,compensation etc;

i. Income Tax Act, 1961 and other Indirect Tax laws;

j. Sexual Harassment of Women at Workplace(Prevention, Prohibition and Redressal) Act, 2013;

k. Bombay Shops and Establishments Act, 1948;

l. Electricity Act, 2003.

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards in respect of Meeting of Board ofDirectors (SS-1) and General Meetings (SS-2) issued by TheInstitute of Company Secretaries of India.

(ii) The SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015 entered into by the Company with BSELimited and National Stock Exchange of India Limited.

To the best of our knowledge and belief, during the period under review, the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

We further report that there were no events/action in pursuance of:

a. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 and amendmentsfrom time to time;

b. The Securities and Exchange Board of India (Delisting ofEquity Shares) Regulations, 2009;

c. The Securities and Exchange Board of India (Buyback ofSecurities) Regulations, 1998;

We further report that based on the information provided and the representation made by the Company and also on the review of the compliance reports of Managing Director and Chief

Financial Officer taken on record by the Board of Directors of the Company in our opinion adequate systems and processes exist in the Company to monitor and ensure compliance with provisions of applicable general laws like labour laws,etc.

We further report that:The Board of Directors of the Company is duly constituted with a proper balance of Executive Director, Non-Executive Directors and Independent Directors as required under Companies Act, 2013. There were no changes in the composition of the Board of Directors during the period under review.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Decisions at the meetings of the Board of Directors of the Company were carried unanimously. There were no dissenting views by any member of the Board of Directors during the period under review.

There are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the year following special event had occurred:

1. Declared Interim Dividend;

We further report that during the audit period the Company and its officers has co-operated with us and have produced before us all the required forms information, clarifications, returns and other documents as required for the purpose of our audit.

Prashant S. Mehta Practising Company Secretary

Place: Mumbai Membership No.: 5814Date: April 18, 2018. CP. No.: 17341

61Mastek Limited


ANNEXURE 5Disclosure under Section 197 (12) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014

A. Information as per Rule 5(1) of Chapter XIII, Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014

(I) Ratio of the remuneration of each Director and KMP to the median remuneration of the employees of the Companyfor the financial year 2017-18:

Sr. no.

Names of Directors/ KMP and designation

Remuneration (amount in `) % increase in remuneration in

the financial year 2017-18

(amount in `)

ratio of the remuneration of

each director to the median remuneration

of the employees

Financial Year2017-2018

Financial Year2016-2017

1 Mr. Sudhakar Ram- Vice Chairman & Managing Director

94,20,816 1,20,69,040 (21.94) 17.50X

2 Mr. Ashank Desai- Non-Executive Director* 61,965 1,12,264 (44.80) 0.12X3 Mr. S. Sandilya- Non- Executive Chairman

and Independent Director13,50,000 18,00,000 (25.00) 2.51X

4 Mr. Atul Kanagat- Non-Executive Director(Independent) @

6,00,000 NIL 100% 1.11X

5 Ms. Priti Rao- Non-Executive Director (Independent)

6,00,000 9,50,000 (36.84) 1.11X

6 Mr. Keith Bogg- Non-Executive Director (Independent)

NIL NIL NA NA

7 Mr. Abhishek Singh (Group Chief Financial Officer)

1,32,57,474 41,79,960 217.17 24.62X

8 Dinesh Kalani (Company Secretary) 35,14,249 30,32,145 15.90 6.53X

*Remuneration consist of certain benefits/perquisites as approved by the shareholders under enabling resolution.@ Mr. Atul Kanagat has not taken any sitting fees and/or commission till March 31, 2017 volutionarily.

(II) The percentage increase in the median remuneration of employees and Key Managerial Personnel in the financial year 2017-18:

Percentage of increase in the median remuneration of employees and Key Managerial personnel in the Financial Yearended March 31, 2018 was 14%.

The ratio of the remuneration of the highest paid Director to that employees who are not directors but receive remuneration inexcess of the highest paid directors during the year: Not applicable

(III) The percentage increase in the median remuneration of employees in the financial year 2017-18: 14%.

(IV) The number of permanent employees on the rolls of Company: 1090

(V) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financialyear and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out ifthere are any exceptional circumstances for increase in the managerial remuneration:

Average percentage increase made in the salaries of the Employees other than the Managerial personnel in theFinancial Year was 16 % vis a vis increase of 29 % in the salaries of Managerial Personnel.

(VI) Affirmation that the remuneration is as per the remuneration policy of the Company:

We affirm that the remuneration is as per the remuneration policy of the Company.


B. Information as per Rule 5(2) of Chapter XIII, Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014

Sr. no.

Names andDesignation of the Employee

Ageof the

Employee

Qualifications andExperience (in years)

of the employee

Date ofJoining

Remunerationpaid during the financial

year 2018(amount in `)

Last employmentheld by the

employee beforejoining theCompany

Percentageof equity

sharesheld by theemployee in the Company

1 Mr Abhishek Singh, Group Chief Financial Officer

39 PGDM-Finance, B.Com(Hons)

(17 years)

3/1/2016 1,32,57,474 First source Solutions Ltd.

15,929 shares (0.07%)

2 Ms Maninder Kapoor Puri,Group Chief People Officer*

45 MA English, BA English

(26 years)

8/7/2017 72,00,108 First source Solutions Ltd.

-

3 Mr Sanjeev Vishnupant Jagtap,Sr. Vice President - IA Delivery, IIS & TIS*

60 BE, MBA, MCM Graduate (Engineering),

(34 years)

3/10/1997 60,38,932 Ajay Metachem Ltd

26,250 shares (0.11 %)

4 Mr Gautam K Karkera, Group Software Manager*

49 B.COM Commerce(28 years)

2/1/1994 36,48,578 System Plus -

5 Mr Sujit S Rangnekar, Solution Architect*

47 BE Production Engineering,

(25 years)

11/17/1992 29,51,245 NA -

* Employed for part of the financial year.

Note: None of the above employees is related to any Director or Manager of the Company.


Sudhakar Ram S. SandilyaVice Chairman & Managing Director Non- Executive Chairman and Independent Director


63Mastek Limited


ANNEXURE 6DISCLOSURE AS REQUIRED UNDER SEBI (SHARE BASED EMPLOYEE BENEFITS) REGULATIONS, 2014 AS ON MARCH 31, 2018

A. Employee Stock Option Scheme

Sr. No

Particulars Plan IV Plan V Plan VI Plan VII

1 Date of Shareholders’ Approval

August 09, 2007 March 20, 2009 October 01, 2010 July 17, 2013

2 Total number of options/ RSU’s approved under the scheme

1,000,000 1,500,000 2,000,000 2,500,000

3 Vesting Requirements

Options:The first vesting of the stock options shall happen only on completion of one year from the date of grant. Maximum vesting period is four years from the date of Grant

Options/ RSU’s:The first vesting of the stock options/RSUs shall happen only on completion of one year from the date of grant. Maximum vesting period is four years from the date of Grant.

Options/ RSU’s:The first vesting of the stock options/RSUs shall happen only on completion of one year from the date of grant. Maximum vesting period is four years from the date of Grant.

Options:The first vesting of the stock options shall happen only on completion of one year from the date of grant. Maximum vesting period is four years from the date of Grant.RSU’s:Applicable to certain section of employees. Vesting period will be 3 years and the vesting schedule would be 20% at the end of one year, 30% at the end of second year and 50% at the end of third year. The price of options/ RSU’s would be ` 5/- per share (Face value)

4 Exercise Price or Pricing Formula

Market Price The exercise price as may be determined by the Nomination and Remuneration Committee and such price may be the face value of the share from time to time or may be the Market Price or any price as may be decided by the Committee.

5 Variation in terms of Options/ RSU’s

During the year ended June 30, 2011, the Company has extended the vesting period from two years to seven years. The company has entered into the scheme of arrangement in the financial year 2015-16. Mastek Limited got split into Mastek Limited & Majesco Ltd. Subject to this arrangement, the exercise price has been revised for the options outstanding on the date of arrangement

The Company has implemented the Scheme Of Arrangement in the financial year 2015-16, effective April 01, 2014. Mastek Limited got split into Mastek Limited & Majesco Ltd. Subsequent to this arrangement, the exercise price has been proportionately revised for the options outstanding on the date of arrangement. Ratio of split up was 37:63

6 Source of Shares Primary7 Maximum Term

of Options/ RSU’s Granted

11 years from the date of Grant


B.

Op

tio

ns/

RSU

’s M

ove

men

t D

uri

ng

th

e ye

ar

Part

icul

ars

Year

end

ed M

arch

31

, 201

8Ye

ar e

nded

Mar

ch

31, 2

017

Year

end

ed M

arch

31

, 201

8Ye

ar e

nded

Mar

ch

31, 2

017

Year

end

ed M

arch

31,

20

18Ye

ar e

nded

Mar

ch

31, 2

017

Year

end

ed M

arch

31

, 201

8Ye

ar e

nded

Mar

ch

31, 2

017

No.

of

shar

e op

tion

s/

RSU

’s

Wei

ghte

d av

erag

e Ex

erci

se

pric

e (in

`)

No.

of

shar

e op

tion

s/

RSU

’s

Wei

ghte

d av

erag

e Ex

erci

se

pric

e (in

`)

No.

of

shar

e op

tion

s/

RSU

’s

Wei

ghte

d av

erag

e Ex

erci

se

pric

e (in

`)

No.

of

shar

e op

tion

s/

RSU

’s

Wei

ghte

d av

erag

e Ex

erci

se

pric

e (in

`)

No.

of

shar

e op

tion

s/

RSU

’s

Wei

ghte

d av

erag

e Ex

erci

se

pric

e (in

`)

No.

of

shar

e op

tion

s/

RSU

’s

Wei

ghte

d av

erag

e Ex

erci

se

pric

e (in

`)

No.

of

shar

e op

tion

s/

RSU

’s

Wei

ghte

d av

erag

e Ex

erci

se

pric

e (in

`)

No.

of

shar

e op

tion

s/

RSU

’s

Wei

ghte

d av

erag

e Ex

erci

se

pric

e (in

`)

Plan

Plan

IVPl

an V

Plan

VI

Plan

VII

Out

stan

ding

op

tions

/ RSU

’s at

th

e be

ginn

ing

of

the

year

147,

927

98.9

527

6,11

710

5.36

62,2

2568

.24

143,

825

64.9

310

,23,

660

79.4

713

,42,

312

80.6

910

,93,

480

114.

019,

77,3

7387

.49

No.

of O

ptio

ns/

RSU

’s G

rant

ed

durin

g th

e ye

ar

--

--

--

--

--

--

6,65

,825

217.

533,

20,0

0016

8.84

No.

of O

ptio

ns/

RSU

’s Ex

erci

sed

durin

g th

e ye

ar

and

No.

of s

hare

s ar

ising

as

a re

sult

of

exer

cise

of o

ptio

ns/

RSU

’s

(15,

894)

116.

42(7

,247

)11

2.79

(10,

000)

46.6

2(7

9,10

0)62

.91

(1,9

2,74

4)62

.27

(1,8

9,86

9)47

.77

(95,

885)

100.

14(1

,04,

043)

61.7

1

No.

of O

ptio

ns/

RSU

’s La

psed

/C

ance

lled

durin

g th

e ye

ar

(86,

382)

96.8

9(1

20,9

43)

112.

76-

-(2

,500

)46

.62

(29,

875)

174.

52(1

,28,

783)

138.

95(2

,40,

199)

294.

25(9

9,85

0)84

.42

No.

of O

ptio

ns/

RSU

’s C

ance

lled

revo

ked

durin

g th

e ye

ar

--

--

2,50

046

.62

--

--

--

--

--

No.

of O

ptio

ns/

RSU

’s Ve

sted

dur

ing

the

year

45,6

5196

.77

147,

927

98.9

554

725

71.2

062

,225

68.2

46,

49,5

0665

.88

5,90

,631

59.6

94,

91,2

3294

.47

2,89

,384

81.6

9

No.

of O

ptio

ns/

RSU

’s O

utst

andi

ng

at th

e en

d of

the

year

45,6

5196

.77

147,

927

98.9

554

,725

71.2

062

,225

68.2

48,

01,0

4180

.06

10,2

3,66

079

.47

14,2

3,22

113

2.95

10,9

3,48

011

4.01

No.

of O

ptio

ns/

RSU

’s Ex

erci

sabl

e at

th

e en

d of

the

year

45,6

5196

.77

147,

927

98.9

554

,725

71.2

062

,225

68.2

46,

49,5

0665

.88

5,90

,631

59.6

94,

91,2

3294

.47

2,89

,384

81.6

9

Mon

ey re

alise

d by

ex

erci

se o

f opt

ions

/ RS

U’s

durin

g th

e ye

ar (i

n `)

18,5

0,36

6-

8,17

,367

-4,

66,2

00-

49,7

6,31

5-

1,20

,02,

975

-90

,69,

107

-96

,02,

163

-64

,50,

341

-

65Mastek Limited


C. Employee-wise details of options/ RSU’s granted during the year to:

(i) Senior Managerial Personnel Plan IV Plan V Plan VI Plan VIIJohn Timothy Owen - - - 50,000Abhishek Singh - - - 1,13,500Prahlad Koti - - - 25,000Hiren Ramesh Shah - - - 6,500Maninder Kapoor Puri - - - 30,000Robert Hart King - - - 30,000Arun Agarwal - - - 5,000Ken James Milne - - - 4,000

(ii) Employees who were granted, during any one year, options/ RSU’s amounting to 5% or more of the options/ RSU’s granted during the yearJohn Timothy Owen - - - 50,000Abhishek Singh - - - 1,13,500Maninder Kapoor Puri - - - 30,000Robert Hart King - - - 30,000

(iii) Identified employees who were granted options/ RSU’s, during any one year, equal or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant

- - - -

D. Diluted Earnings Per Share pursuant to issue of shares on exerciseof options/ RSU’s calculated in accordance with Accounting Standard (AS)

Consolidated: 28.14Standalone: 6.33

E. Method used to account for ESOS- The Company has recognised compensation cost using fair value method of accounting. The Company has recognised stock option compensation cost of ` 395 lakhs in the statement of profit and loss

F. Method and Assumptions used to estimate the fair value of options/ RSU’s granted during the year:The weighted average fair value of each unit under the plan, granted during the year ended was ` 257 using the Black-Scholes model with the following assumptions:Particulars As at March 31, 2018Weighted average grant date share price 349.8Weighted average exercise price 217.5Dividend yield % 1.7%Expected life 3-7Risk free interest rate 6.80%Volatility 67.80%

Volatility: Volatility is a measure of the amount by which a price hedge fluctuated or is expected to fluctuate during the period. The measure of volatility is used in Black Scholes option-pricing model is the annualised standard deviation of the continuously compounded rates of return on the stock over a period of time. Company considered the daily historical volatility of the Company’s stock price on NSE over the expected life of each vest.

Risk free rate: The risk free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options/ RSU’s based on zero coupon yield curve for government securities.

Expected life the Options/ RSU’s: Expected life or the options/ RSU’s is the period for which the Company expects the options/ RSU’s to be live. The minimum life of stock options/ RSU’s is the minimum period before which the options/ RSU’s cannot be exercised and the maximum life of the option is the maximum period after which the options/ RSU’s cannot be exercised. The Company have calculated expected life as the average of the minimum and the maximum life of the options/ RSU’s.

Dividend yield: Expected dividend yield has been calculated as a total of interim and final dividend declared in last year preceding date of grant.


G. For options / RSU’s outstanding at the end of the year, the period, the range of exercise prices and weighted average remaining contractual life (vesting period + exercise period). If the range of the exercise prices is wide, the outstanding options/ RSU’s should be divided into ranges that are meaningful for assessing the number and timing of additional shares that may be issued and cash that may be received upon exercise of those options/ RSU’s:

Details for ESOP Scheme IV, V, VI and VII:

Price range (in `)

Number of options/ RSU’s

Weighted average remaining life (Years)

5 3,58,574 7.865 and above 19,66,064 6.10Total 23,24,638 -

H. For other instruments granted during the year (i.e., other than stock options) - Number and weighted average fair value of those instruments at thegrant date- Fair Value determination in case(a) fair value not measured on the basis of an observable market price(b) whether and how expected dividends were incorporated(c) whether and how any other features were incorporated

No other instruments were granted during the year

I. For employee share-based payment plans that were modified / varied duringtheperiod–- Explanation of those modifications/ variations- Incremental fair value granted (as a result of those modifications/variations) - Information on how those incremental fair value granted wasmeasured, consistently with the requirements set out in point 7 of SEBI(Share based employee benefits) Regulations, 2014.

No modifications were made to the schemes during the year.

J. Relevant disclosures in terms of the ‘Guidance note on accounting for employee share-based payments’ issued by ICAI or any other relevant accounting standards as prescribed from time to time.

Members may refer the relevant Notes in Audited Financials Statement of the Company prepared for Financial Year 17-18.

Note for Information: The Company has implemented the Scheme Of Arrangement in the financial year 2015-16, effective April 01, 2014. Mastek Limited got split into Mastek Limited & Majesco Ltd. Subsequent to this arrangement, the exercise price has been proportionately revised for the options outstanding on the date of arrangement. Ratio of split up was 37:63.


Sudhakar Ram S. SandilyaVice Chairman & Managing Director Non-Executive Chairman and Independent Director

Abhishek Singh Dinesh KalaniGroup Chief Financial Officer Company Secretary


67Mastek Limited


ANNEXURE 7ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR)

ACTIVITIES/ INITIATIVES FOR THE FINANCIAL YEAR 2017-18[Pursuant to Section 135 of the Act & Rules made thereunder]

1. A brief outline of the company’s CSR policy, including overview of projects or programme proposed to be undertaken and areference to the web-link to the CSR policy and projects or programmes.

The CSR policy is being developed for the organisation to comply with the provisions of section 135 of the Companies Act, 2013and Companies (Corporate Social Responsibility Policy) Rules 2014. We at Mastek are committed to spending up to 2% of theaverage net profits for the preceding three financial years on CSR projects/programmes related to activities specified in ScheduleVII to the Act or such activities as may be notified from time to time. A CSR committee was constituted as per Board resolutiondated April 26, 2014 in terms of the requirements of the Companies Act, 2013.

The web link is given below:Web link: https://www.mastek.com/sites/default/files/Final_CSRpolicyver1.0.pdf

2. The Composition of the CSR Committee:a. Ms. Priti Rao (Independent Director)b. Mr. Ashank Desai (Non-Executive Director)c. Mr. Sudhakar Ram (Vice Chairman & Managing Director)

3. Average net profit of the company for last three financial years: ` 4,196.97 Lakhs

4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above): ` 83.94 Lakhs

5. Details of CSR spent during the financial year 2017-18:a. Totalamountspentforthefinancialyear2017-18–` 84 lakhsb. Amount unspent, if any: NAc. Manner in which the amount spent during the financial year is detailed below.

Sr No.

Projects/Activities Undertaken SectorLocations

Amount Outlay

(Budget) Project or Programs

wise

Amount Spent on the

project or programs

Cumulative Expenditure

Up to reporting

period

Amount spent:

Through implementing

agency*

Districts (State)

` in Lakhs ` In Lakhs ` In Lakhs

1. Supporting pre-school establishment and learning centre for migrant children. Providing mid-day meals to children. Supporting vocational training programme of youth in Mumbai. Providing educational and recreational facilities to homeless, conflict hit migrant orphan female children from poor and deprived sections from strife-torn valley of Kashmir.

Education Kolkatta, West BengalThane, MaharashtraMumbai, MaharashtraTalab Tillo, Jammu and KashmirPalghar

27.59 27.59 27.59

2. Supporting tribal hospital reaching out to 5000 patients, awareness generation for health workers, farmers and villagers on health and sanitation, Supporting the Thalassemia Prevention programme. Mortality control program for tribal people with limited access to proper healthcare facilities.

Healthcare Maharashtra 24.70 24.70 24.70


Sr No.

Projects/Activities Undertaken SectorLocations

Amount Outlay

(Budget) Project or Programs

wise

Amount Spent on the

project or programs

Cumulative Expenditure

Up to reporting

period

Amount spent:

Through implementing

agency*

Districts (State)

` in Lakhs ` In Lakhs ` In Lakhs

3 Providing speciality surgeries to street animals, donation and ambulance.

Animal Welfare

Thane, Maharashtra

8.42 8.42 8.42

4 Building an adoption centre for 345 women (unwed mothers and rape victims)

Women empowerment

Maharashtra 20 .00 20.00 20.00

5 Supporting public welfare trusts established for welfare of underprivileged citizens.

Under privileged citizens’ welfare

Mumbai- Maharashtra

3.23 3.29 3.29

Total funds 83.94 84.00 84.00

* Amounts are given through Mastek Foundation, who got the project implemented through the following agencies:

1. Snehalaya–Ahmednagar,Maharashtra.

2. TagoreFoundation–Kolkatta,WestBengal

3. Sangopita–Thane,Maharashtra

4. Aarambh–Thane,Maharashtra

5. PrasadChikitsa–Thane,Maharashtra

6. MahanTrust–Amravati,Maharashtra

7. SEARCH–Gadchiroli,Maharashtra

8. ThinkFoundation–Mumbai,Maharashtra

9. ThaneSPCA–Thane,Maharashtra

10. PlantandAnimalWelfareSociety(PAWS)–Thane,Maharashtra

11. SunbirdTrust–Imphal,Manipur

12. Kherwadi Social Welfare Association - Mumbai, Maharashtra

13. BorderlessWorldFoundation–JammuandKashmir

14. MumbaiFirst–Mumbai,Maharashtra

15. Making A Difference (M.A.D) Foundation, Vikramgarh, Palghar, Maharashtra.

6. In case the company has failed to spend the two per cent of the average net profit of the last three financial years or any partthereof, the company shall provide the reasons for not spending the amount in its Board report: Not Applicable

7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance withCSR objectives and Policy of the Company.

The CSR projects are monitored on a half yearly basis. The monitoring report has been prepared as per the policy. The monitoring of projects has been done keeping in mind the CSR Objectives of the Company.

Priti Rao Ashank Desai Sudhakar RamChairperson Member Member

Date : April 18, 2018Place :Mumbai

69Mastek Limited


I. Company’s Philosophy

The Company’s philosophy on Corporate Governance,is based on strong foundations of ethical values andprofessionalism which being practiced since the inceptionof the Company. Integrity, transparency, fairness,accountability and compliance are embedded in theCompany’s business practices. The Company’s Code ofBusiness Conduct, its Whistle Blower, other policies and itswell-defined Internal Control Systems which are subjectedto rigorous audits periodically for their effectiveness,reinforces accountability and integrity of reporting andensures transparency and fairness in dealing with theCompany’s Stakeholders. The Company’s focus on itscustomer centric approach together with its value addedinnovative service offerings and its involvement in CSRactivities has enabled the Company to earn the trustand goodwill of its stakeholders on a consistent basis.The Company’s policy of timely disclosures, transparentaccounting policies and a strong and Independent Board,goes a long way in preserving Stakeholders’ interest, whilemaximizing long-term Shareholder values.

Corporate Governance practiced at the Company is not restricted to Board of Directors, it is an approach to Sustainable Development.

Mastek has always strived to go beyond the statutory and regulatory requirements of Corporate Governance. Our endeavour is to follow good governance both in letter as well as in spirit.

Governance Structure

Mastek’s Governance structure broadly comprises of the Board of Directors and the Committees of the Board at the apex level and the Management structure at the operational level. This layered structure brings about a harmonious blend in Governance as the Board sets the overall corporate objectives and gives direction and freedom to the Management to achieve these corporate objectives within a given framework, thereby bringing about an enabling environment for value creation through sustainable and profitable growth.

II. Board of Directors

(i) Size and Composition of the Board

The Company has a very balanced and diverse Boardof Directors, including one Independent WomanDirector. The Board of Directors of the Company

has a combination of Executive, Non-Executive and Independent Directors. The Composition of the Board primarily takes care of the business needs and stakeholders’ interest. The Non-Executive Directors including Independent Directors on the Board are well qualified, experienced, competent and highly renowned persons with varied professional background in the field of Information Technology, Finance, Management, Marketing and Strategic, etc. They take active part at the Board and Committee Meetings by providing valuable guidance & expert advice to the Management on various aspects of business, policy direction, governance, compliance etc. and play critical role on strategic issues, which enhances the transparency and add value in the decision making process of the Board of Directors. The Company has also devised a policy on board diversity.

As on March 31, 2018 the Board had 6 (six) members, of which 2 (two) are Promoter-Directors and the rest 4 (four) are Independent Directors including one Woman Director.

The Chairman of the Board is a Non-Executive Independent Director. The Composition of the Board of Directors is in conformity with the requirement of Regulation 17 of Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015 (SEBI Listing Regulations).

None of the Directors have any inter-se relationship among themselves.

(ii) Profile of Board of Directors

1. Mr. S. Sandilya: (DIN 00037542) - Non-Executive Chairman and IndependentDirector

Mr. S. Sandilya is a Commerce Graduatefrom Madras University and holds an MBAfrom the Indian Institute of Management,Ahmedabad. He has almost five decades ofprofessional experience. Mr. Sandilya is alsothe Non-Executive Chairman of Eicher Group.He joined Eicher Group in 1975 and has heldvarious responsibilities in the areas of GroupFinance including Information Technology,Strategic Planning, Manufacturing and General

Report on Corporate Governance


Management. He was the Group Chairman and Chief Executive for six years before becoming a Non-Executive Chairman, the post he continues to hold.

Additionally, Mr. Sandilya is a Director of Tube Investments of India Limited, Rane Brake Lining Limited, GMR Infrastructure Limited, Lean Management Institute of India. In the past, he has held leading positions at the Society of Indian Automobile Manufacturers, International Motorcycle Manufacturers Association, Geneva and Member of the Board of Directors and Lean Global Network, USA.

He has been a National Council Member of Confederation of Indian Industries (CII) for many years. He is also the Non-Executive President of SOS Children’s Villages of India, a Non-Profit Organisation providing care for abandoned and vulnerable children.

Mr. Sandilya is a Chairman of Board, Audit Committee, Stakeholder Relationship Committee and a Member of Nomination and Remuneration Committee of the Company.

Mr. Sandilya joined the Mastek Board on January 19, 2012 and holds 26,000 (0.11%) Equity Shares in the Company.

2. Mr. Sudhakar Ram: (DIN 00101473) - ViceChairman & Managing Director

One of the Co-founder Director of Mastek,Mr. Ram is at the helm of several strategicinitiatives that will help the Company achieveits vision of becoming a world class provider ofVertical Enterprise Platforms and Applicationsthat enable business transformation. Within theMastek organisation, his focus is on bringingabout a marked shift in leadership, commitment,creativity and culture with a view to acceleratedincrease in value delivery.

Mr. Ram, as a veteran of the IT industry, is alsoa keen observer of domestic and global IT andbusiness trends. He uses his deep insight into theindustry to frequently write articles and columnsfor leading newspapers.

Mr. Ram is a silver medalist from Indian Instituteof Management (IIM), Calcutta. Before joiningMastek, he was the CIO of Rediffusion DentsuYoung & Rubicam.

Mr. Ram is a Member of Stakeholder Relationship Committee and Corporate Social Responsibility Committee of the Company.

Mr. Ram joined the Mastek Board in the year 1984 and holds along with his family members (including private family trust) 28,55,608 (12.05%) Equity Shares in the Company.

3. Mr. Ashank Desai: (DIN 00017767) - Non-Executive Director

Mr. Ashank Desai, is an IT Industrialist andhas done B.E. from Mumbai University and ingraduating year, held the second rank in theUniversity. He holds a M. Tech Degree fromthe Indian Institute of Technology, Mumbai.He also holds Post Graduate Diploma inBusiness Management (PGDBM) from theIIM Ahmedabad. He has worked with Godrejand Boyce before founding the Mastek. He isactively associated with several governmentbodies and trade associations.

Mr. Desai is the Founder and Former Chairman of Mastek. He also guides and Trustee to Mastek Foundation, whose mission is to enable “Informed Giving and Responsible Receiving”.

Mr. Desai is widely recognised as an industry veteran and is one of the founder members & Past Chairman of NASSCOM. He was a former President of Asian Oceanian Computing Industry Organisation (ASOCIO), an Association of 20 countries in this region. He also serves as Vice-Chairman, Society for Innovation and Entrepreneurship (SINE) at his alma mater IIT Bombay.

Mr. Desai is actively involved in the field of education, and is a Member of Governing Board of IIM Ahmedabad, a Member of Governing Board of Goa Institute of Management (GIM), Vice Chairman of Rashtriya Uchchatar Shiksha Abhiyan (RUSA) for Goa Government. He is also the Vice Chairman, Governing Board of Bombay First, an NGO working on the mission to make Mumbai a world class city.

Mr. Desai’s other public contributions include serving as Member of the Maharashtra State Security Council. He is involved in CII & FICCI

71Mastek Limited


both at the Regional as well as National Level. He was earlier Member, International Team on Economic Reforms for the President of Zambia.

He has been felicitated by the Prime Minister Shri Narendra Modi for his contribution to NASSCOM & IT Industry for the last 25 years. He has been conferred with the “Distinguished Alumnus” Award from IIT Bombay and the Computer Society of India (CSI) “Fellow of the Society” honour in recognition of his services to the Indian IT Industry as an entrepreneur and for his contribution to the growth of education. He has also been presented with the Honourable Contributors Award by ASOCIO - the only Indian to receive this recognition twice. He was conferred with the much coveted Outstanding Entrepreneur Award at the Asia Pacific Entrepreneurship Awards (APEA) 2010 India.

Mr. Desai is a Chairman of Governance Committee and a Member of Audit Committee, Corporate Social Responsibility Committee, Stakeholder Relationship Committee and Nomination & Remuneration Committee of the Company.

Mr. Desai joined the Mastek Board on June 06, 1982 and holds along with his family members 34,07,952 (14.38%) Equity Shares in the Company.

4. Ms. Priti Rao: (DIN 03352049) - Non-Executive and Independent Director

Entrepreneur & Managing Director at PumpkinPatch Daycare which caters to needs to youngparents, who need a trusted place where theycan keep their kids and be able to focus on theircareers. India lacks such world class infrastructure where Love, care safety are most importantaspect. Her focus is to create happy children andhelp women go back to work. Currently she runs10 daycare centres in Pune, with 1000 + childrenunder their care.

She is also the Chairperson of Aatmaja foundation, which is a non-profit organisation, focused on enabling bright young girls from disadvantaged background to become successful professionals which was launched in January, 2015. They are now supporting 100 adolescent girls to pursue professional Education.

She holds 25 years of diverse experience in building and delivering range of IT services for customers located across five continents. She has built large remote infrastructure services business using global delivery model. She held senior executive positions with global teams P & L responsibility and large location responsibility for best of breed IT services companies and multinational.

She holds a postgraduate degree in Computer Science from Indian Institute of Technology (IIT), Mumbai. She won the prestigious “IT woman of the year award” from the Computer Society of India for 2002; and also the “PUNE 2007 SUPER ACHIEVERS AWARDS” in August, 2007.

Ms. Rao is a Chairperson of Corporate Social Responsibility Committee and a Member of Governance Committee and Audit Committee of the Company.

Ms. Rao joined the Mastek Board on January 17, 2011 and holds 29,600 (0.12%) Equity Shares in the Company. She is also on the Board of Quick Heal Technologies Ltd.

5. Mr. Atul Kanagat: (DIN 06452489) - Non-Executive and Independent Director

Mr. Atul Kanagat is a B.Tech in MechanicalEngineering from Indian Institute of Technology,Mumbai and a MBA from Harvard BusinessSchool, Boston, Massachusetts.

Mr. Kanagat initially joined Hindustan Lever Ltd., the Indian subsidiary of Unilever. He spent two years as Management Trainee doing assignments in multiple functions of the company. He then spent a year as Materials Manager for Hindustan Lever Ltd’s Calcutta Manufacturing complex.

After completing his MBA at Harvard, in 1982, Mr. Kanagat joined McKinsey & Company in Chicago. He was elected as Partner in 1988, Director in 1994 and thereafter as Managing Director of the Seattle office during the period 1995 to 2003 and was a Member of the Boards of the following institutions:

• SeattleSymphony;

• FredHutchCancerResearchCenter;and

• GreaterSeattleChamberofCommerce

During the period 2003 to 2009, Mr. Kanagat was also on the Board of Liberty Science Center in Jersey City. During the period 2010 to 2011,


he worked for Harman International as Vice President- Strategy & Mergers & Acquisition.

Mr. Kanagat is a Chairman of Nomination & Remuneration Committee and a Member of Audit Committee and Stakeholder Relationship Committee of the Company.

Mr. Kanagat joined Board on January 21, 2013 and holds 24,600 (0.10%) Equity Shares in the Company.

6. Mr. Keith Bogg: (DIN 07658511) - Non-Executive and Independent Director

Mr. Bogg, A level Economist from University ofHertfordshire, is an experienced London basedCompany Director and business change leaderoperating across multiple functions and sectorswith a focus on strategy, restructuring, growthand shareholder value. At Marks and Spencer,he held multiple roles including Global CIO,Director of Supply Chain and Logistics, andRetail Board Director in addition to the DirectMarketing Function. Mr. Bogg has also heldsenior business change relationship roles withBBC Technology, Catlin Insurance group andas a public and private sector client facingstrategic advisor for Gartner. Most recently, heheld a Non-Executive Chairman role with Data

& Research Services Plc., and currently holds advisory roles with the Civil Aviation Authority and the Grosvenor Group, UK.

Mr. Bogg is Director on the Board of “The Anchorage Residents Management Limited” U.K.

Mr. Bogg is a Member of Audit Committee and Governance Committee of the Company. Mr. Bogg joined the Board on January 17, 2017 and does not hold any shares in the Company.

(iii) Board Diversity

Your Company has over the years been fortunate tohave eminent persons from diverse fields as Directorson its Board. Pursuant to SEBI Listing Regulations,the Nomination & Remuneration Committee hasformalised a policy on Board Diversity to ensure diversity of experience, knowledge, perspective, background,gender, age and culture. The policy is posted on theCompany’s website and can be accessed on web linkhttps://www.mastek.com/corporate-governance

(iv) Number of Board Meetings

A calendar of Board and Committee meetings is agreed and circulated in advance to the Directors. During thefinancial year ended March 31, 2018, 5 (Five) BoardMeetings were held on April 20, 2017, July 19, 2017,October 26, 2017, January 18, 2018 and March 09,2018, details where of are given below:

(v) Directors’ Attendance and Directorships held

Name of Director

Category of Directorship

No. of Board

Meetings attended

Attendance at last AGM on June 22,

2017

Date of Appointment in the current

term

No. of other Directorship held

in Indian Public Limited Companies (including Mastek)

No. of Committees

Memberships (including

Mastek)

No. of Committees

Chairmanship (including

Mastek)

Mr. S. Sandilya

Non- Executive Chairman and Independent Director

5 of 5 Yes 01-04-2015 6 2 5

Mr. Sudhakar Ram

Vice Chairman & Managing Director (Promoter)

5 of 5 Yes 01-07-2017* 1 1 --

Mr. Ashank Desai

Non-Executive Director (Promoter)

5 of 5 Yes 12-01-2007 3 3 --

Ms. Priti Rao Non- Executive Director (Independent)

5 of 5 Yes 01-04-2015 1 1 --

Mr. Atul Kanagat

Non-Executive Director (Independent)

4 of 5 No 01-04-2015 1 2 --

Mr. Keith Bogg

Non-Executive Director (Independent)

5 of 5 No 17-01-2017 1 1 --

*Re-appointed by shareholders at the Annual General Meeting held on June 22, 2017 for a further period of three years i.e. from July 01,2017 to June 30, 2020.

73Mastek Limited


Notes:

1. None of the Directors is a member of morethan 10 Board-level Committees, or a Chairmanof more than 5 such committees which is, incompliance with the SEBI Listing Regulationsand Companies Act, 2013. Further, none of theDirectors act as an Independent Director in morethan 7 Listed Companies.

2. Particulars of Director retiring by rotation andseeking re-appointment have been given in theNotice convening the Annual General Meetingattached thereto.

3. The Committees considered for the purpose ofcalculation of membership and/or chairmanshipas discussed above are those as specified in theSEBI Listing Regulations i.e. Audit Committeeand Stakeholder Relationship Committee only.

4. As prescribed under Section 165 of CompaniesAct, 2013 in calculating the number ofDirectorships, Private Limited Companies whichare neither a subsidiary nor a holding Companyof Public Ltd. Co., have been excluded. AlsoDirectorship held in Foreign Companies andSection 8 Companies have also been excluded.

5. None of the Directors are related to any of theDirectors.

(vi) Manner of Performance Evaluation of the Board,Committees and Directors

In compliance with Companies Act, 2013 and theSEBI Listing Regulations, the Board of Directorshas carried out an annual evaluation of its ownperformance, Board Committees, Individual Directors,Chairpersons, Managing Director for the year underreview. In respect of individual Directors including theNon-Executive Chairman and the Managing Director,their personal performance was carried out using apeer review process, facilitated by an outside subjectmatter expert with confidential processing of inputs,interpretation of findings followed by one-on-onemeeting of the individual Directors, and concludingwith an aggregate presentation to the entire board.

Board and Committee functioning was reviewed and evaluated on the basis of responses from Directors, Committee members, Managing Director through structured questionnaires, covering various aspects of the composition and functioning of the Board and its Committees.

In a separate meeting of the Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman were also evaluated, taking into account the views of Executive Directors and Non- Executive Directors. The Directors were asked to provide their valuable feedback and suggestions about the overall functioning of the Board and its Committees and its areas of improvement for a higher degree of engagement with the Management.

The Board expressed its satisfaction with the Evaluation results, which reflects the high degree of engagement of the Board and its committees with the Company and its Management. Based on the outcome of the evaluation and assessment cum feedback of the Directors, the Board and the Management have also agreed on various points which will be implemented over an agreed timeframe.

The Nomination and Remuneration Committee of the Company identifies and ascertains the integrity, qualification, expertise, positive attributes and experience of persons for appointment as Directors and thereafter recommends the candidature for election as a Director on the Board of the Company. The Committee follows defined criteria in the process of obtaining optimal Board diversity which, inter alia, includes optimum combination of executive and non-executive directors, appointment based on specific needs and business of the Company, qualification, knowledge, experience and skill of the proposed appointee, etc. The Policy on appointment and removal of Directors, Remuneration to Directors/Key Managerial Personnel/ Senior Management forms part of the Nomination and Remuneration Policy of the Company, which is available on the Company’s website at https://www.mastek.com/corporate-governance

(vii) Independent Directors

Independent Directors play a vital role in thegovernance process of the Board and its Committees.With their expertise in various fields, they enrichthe decision making process at the Board and itsCommittees.

The appointment of Independent Directors is made in a structured manner. The Nomination & Remuneration Committee identifies potential candidates based on certain criteria and considers the diversity of the Board.


The Independent Directors have confirmed that they meet the criteria of independence laid down under the Companies Act, 2013 and SEBI Listing Regulations and also in the opinion of the Board and as confirmed by the Independent Directors, they fulfill the conditions specified in section 149 of the Companies Act, 2013 and the Rules made thereunder about their status as Independent Director.

During the year under review, the Independent Directors met 3 times on April 20, 2017, July 19, 2017 and January 18, 2018 inter-alia:

• TodiscussthefinancialsoftheCompany;

• To assess the quality, quantity and timelines offlow of information between the Companymanagement and the Board that is necessary forthe Board Members to effectively and reasonablyperform their duties;

• Evaluationof PerformanceofNon-IndependentDirectors and the Board as whole;

• Evaluation of Performance of Chairperson ofthe Company, taking into account the views ofExecutive Directors and Non-Executive Directors;and

• Otherrelatedmatters;

All the Independent Directors were present throughout at each of the Meetings. They expressed satisfaction on the Board Member’s freedom to express views on the business transacted at the various Board and Committee meetings and the openness with which the Management discussed various subject matters on the agenda of the meetings.

(viii) Induction Program for New Directors and On-going Familiarisation Programme for ExistingIndependent and Non-Independent Directors

An appropriate induction programme for newDirectors and an on-going familiarisation programmewith respect to the business of the Company for all the Directors is provided so that meaningful Board leveldeliberations are held and sound business decisionsare taken.

At the time of appointment of a Director, a formal letter of appointment is issued to the Director. The letterof appointment inter-alia includes the role, function,duties and responsibilities of the Director and theBoard’s expectations from the Director. The Director isalso explained the various compliances required fromhim/her under the Companies Act, 2013, SEBI ListingRegulations and other relevant Regulations.

Every new Director of the Board needs to attend an Orientation Program organised by the Company. Presentations are made by Managing Director, Group CEO, Group CFO and Senior Management team, providing an overview of strategy, operations and functions of the Company. An opportunity is provided to the Directors to interact with senior leadership of the Company and help them to get ground level information on the Company’s services offering, Markets, Software Delivery, Organisation Structure, Finance, HR, Technology, Quality Facilities, Risk Management and Regulatory Compliances.

The above initiatives help the Directors to understand the Company, its business and the regulatory framework in which the Company operates and equips him/her to effectively fulfil role as a Director of the Company.

Further, as an on-going process, the Board of Directors is updated on a quarterly basis through presentations and discussions on the overall economic trends, the performance of the IT Industry and that of the Company, analysis of the circumstances which helped or adversely impacted the Company’s performance and the initiatives taken / proposed to be taken to bring about an overall improvement in the performance of the Company, comparison of the Company’s performance with its peers in the Industry as available in public domain, marketing strategy, business risks and mitigation plan, etc. The Directors are periodically updated on the regulatory changes and their impact on the Company.

Details of the programme for familiarisation of Independent Directors with the working of the Company are available on the website of the Company and can be accessed at web link https://www.mastek.com/corporate-governance

(ix) Code of Conduct for Directors and SeniorManagement

The Company has prescribed a code of conduct forDirectors and Senior Management of the Company.The said code has been posted on the Company’swebsite - https://www.mastek.com/corporate-governance

(x) Board Procedure

The meetings of the Board of Directors are generallyheld at the Company’s Office situated at Mahape,Navi Mumbai. The meetings are generally scheduledwell in advance. In case of exigencies or urgency,resolutions are passed by circulation. The Board

75Mastek Limited


meets at least once a quarter to review the quarterly performance and the financial results. The time gap between two meetings was not more than 100 days. The agenda for the meetings is prepared by the concerned official of the Company in consultation with the top management/executive team of the Company. The agenda papers are circulated in advance before each meeting to all the Directors. The members of the Board have access to all information and are free to recommend inclusion of any matter in the agenda for discussion. Executive Team are invited to attend the Board meetings and provide clarification as and when required. Action Taken Reports (ATR) are put up to the Board periodically. To enable better and more focused attention on the affairs of the Company, the Board delegates certain matters to Committees of the Board set up for the purpose.

The meetings of the Board are governed by a structured agenda. All Board members have access to accurate, relevant and timely information to fulfill their responsibilities. The Board members in consultation with the Chairman may bring up other matters for consideration at the Board meetings. Necessary information as required under the Companies Act, 2013 and SEBI Listing Regulations have been placed before and reviewed by the Board from time to time. The Board also periodically reviews compliance by the Company with the applicable laws/statutory requirements concerning the business and affairs of the Company.

III. COMMITTEES OF THE BOARD:

MANDATORY COMMITTEES:

1. Audit Committee

(i) Terms of Reference

The terms of reference of the Audit Committeeare as follows:

a. Oversee the Company’s financial reportingprocess and the disclosure of its financialinformation to ensure that the financialstatement is correct, sufficient and credible;

b. recommendation for appointment,remuneration and terms of appointment ofauditors

c. approval of payment to statutory auditors for any other services rendered by the statutoryauditors, reviewing, with the management,the annual financial statements and

auditor’s report thereon before submission to the board for approval, with particular reference to:-

• matters required to be included in thedirector’s responsibility statement to beincluded in the board’s report in termsof clause (c) of sub-section (3) of Section134 of the Companies Act, 2013;

• changes, if any, in accounting policiesand practices and reasons for the same;

• major accounting entries involvingestimates based on the exercise ofjudgment by management;

• significant adjustments made in thefinancial statements arising out of auditfindings;

• compliance with listing and otherlegal requirements relating to financialstatements;

• disclosure of any related partytransactions;

• modified opinion(s) in the draft auditreport;

e. reviewing, with the management, thequarterly financial statements beforesubmission to the board for approval;

f. reviewing, with the management, thestatement of uses / application of fundsraised through an issue (public issue,rights issue, preferential issue, etc.), thestatement of funds utilised for purposesother than those stated in the offerdocument / prospectus / notice and thereport submitted by the monitoring agencymonitoring the utilisation of proceedsof a public or rights issue, and makingappropriate recommendations to the boardto take up steps in this matter, if any;

g. reviewing and monitoring the auditor’sindependence and performance, andeffectiveness of audit process;

h. approval of any subsequent modification oftransactions of the Company with relatedparties;

i. scrutiny of inter-corporate loans andinvestments;


j. valuation of undertakings or assets of theCompany, wherever it is necessary;

k. evaluation of internal financial controls andrisk management systems;

l. reviewing, with the management,performance of statutory and internalauditors, adequacy of the internal controlsystems;

m. reviewing the adequacy of internal auditfunction, if any, including the structureof the internal audit department, staffingand seniority of the official heading thedepartment, reporting structure coverageand frequency of internal audit;

n. discussion with internal auditors of anysignificant findings and follow up there on;

o. reviewing the findings of any internalinvestigations by the internal auditors intomatters where there is suspected fraud orirregularity or a failure of internal controlsystems of a material nature and reportingthe matter to the board;

p. discussion with statutory auditors beforethe audit commences, about the natureand scope of audit as well as post-auditdiscussion to ascertain any area of concern;

q. to look into the reasons for substantialdefaults in the payment to the depositors,debenture holders, shareholders (in caseof non-payment of declared dividends)and creditors;

r. to review the functioning of the whistleblower mechanism;

s. approval of appointment and remunerationof Chief Financial Officer after assessing thequalifications, experience and background,etc. of the candidate;

t. Recommend to the Board, the appointmentand remuneration of Internal Auditors; and

u. Carry out any other function as mandatedby the Board from time to time and/orenforced by any statutory notifications,amendments as may be applicable.

(ii) Composition

Mastek has an Audit Committee that currentlycomprises of four Independent Directors anda Non-Executive Director (Non-Independent).The Independent Directors are accomplishedprofessionals from the corporate fields. TheManaging Director, Group Chief ExecutiveOfficer and Group Chief Financial Officer attendthe Audit Committee meetings. The CompanySecretary acts as the Secretary to the Committee.

During the year ended March 31, 2018 theCommittee met 4 (Four) times on April 20, 2017,July 19, 2017, October 26, 2017 and January 18,2018. The attendance of the members at themeetings is stated below:

Name of the Members

Category No. of Meetings Attended

Mr. S. Sandilya, Chairman

Non-Executive/Independent

4 of 4

Mr. Ashank Desai, Member

Non-Executive/Non Independent

4 of 4

Ms. Priti Rao, Member


4 of 4

Mr. Atul Kanagat, Member


4 of 4

Mr. Keith Bogg, Member


4 of 4

The Chairman of the Committee was present at the 35th Annual General Meeting of the Company held on June 22, 2017.

The Audit Committee Meetings are also attended by the Internal Auditors and Statutory Auditors. The Committee’s observations are followed up with the respective departments and the follow-up actions are reported to the Committee at the subsequent Committee meetings. The Committee, along with the statutory auditors, reviews the quarterly, half-yearly and annual results at the Audit Committee meetings before recommending them to the Board of Directors.

(ii) Related Party Transactions

The Company has formulated a policy onmateriality of Related Party Transactions andalso on dealing with Related Party Transactionsand the same has been reviewed from timeto time. This has been posted on the websiteof the Company at https://www.mastek.com/corporate-governance. The Company places

77Mastek Limited


the disclosure regarding the details of all the transactions with related parties on quarterly basis to Audit Committee and Board. Further, suitable disclosure as required by the Accounting Standard (Ind AS-24) has been made in the notes to the Financial Statements.

(iii) Risk Management

Mastek is committed to effective management ofrisks across the organisation by aligning its riskmanagement strategy to its business objectivesand by instituting a risk management structureand frame work for timely identification,assessment, mitigating, monitoring andreporting of risks. Accordingly, a robustEnterprise Risk Management framework havebeen designed and deployed. The status of Riskand its Management is presented to the Board ofDirectors of the Company at periodic intervals.

2. Nomination and Remuneration Committee


• Toidentifythepersonswhoarequalifiedtobecome Director, or who may be appointedin senior management of the Company.

• To lay down criteria for the Company’snomination process for the above positionsand oversee the implementation thereof.

• To finalise and recommend to Boardthe terms of remuneration for Directors,Senior Management, Key ManagerialPersonnel & other senior employees of theorganisation.

• To review all documents pertaining tocandidates and conduct evaluation ofcandidates in accordance with a processand if deemed fit and appropriate, makerecommendation for the nomination to theBoard or for the senior management of theCompany and their removal, if any.

• Todecideandformulatedetailedtermsandconditions of the Employees Stock OptionPlan, governed by the guidelines issued bySEBI and as amended from time to time.

• Toapprovethestockoptionstobegrantedto the eligible employees of the Company/Group under the scheme & finalisationof incentive plan for the employees ofthe Company.

• Torecommendthecompensationstructureof the Directors and Key ManagerialPersonnel’s to the Board.

• Formulate the criteria for determiningqualifications, positive attributesand independence of a director andrecommend to the Board a policy, relatingto the remuneration for the Directors, KeyManagerial Personnel and other employees.

• To recommend the amount of Bonus tobe paid to Managing Director & eligibleemployees.

• To recommend the sitting fees for Non-Executive Directors for attending Board aswell as Committee Meetings.

• Toensurethat-

a) the level and composition ofremuneration is reasonable and sufficient to attract, retain and motivate Directors, of the quality required to run the company successfully;

b) relationship of remuneration toperformance is clear and meetsappropriate performance benchmarks;and

c) remuneration to Directors, KeyManagerial Personnel and SeniorManagement involves a balancebetween fixed and incentive payreflecting short and long-termperformance objectives appropriateto the workings of the company andits goals.

• Succession planning of the Board ofDirectors and Key/Senior ManagerialPersonnel.

• Review the performance of the Board ofDirectors, Key Managerial Personnel basedon certain criteria as approved by the Board.

• Carryoutanyotherfunctionasmandatedby the Board from time to time and/orenforced by any statutory notifications,amendments as may be applicable.

(ii) Composition

The Chairman of the Committee is Mr.Atul Kanagat. The other members are Mr.S. Sandilya and Mr. Ashank Desai. All areNon-Executive Directors.


During the year ended on March 31, 2018 the Committee met 5 (five) times on April 19, 2017, July 18, 2017, October 25, 2016, January 17, 2018 and March 09, 2018. The attendance of the Committee Members at the meetings is stated below:

Name of the Member


Mr. Atul Kanagat, Chairman


4 of 5

Mr. S. Sandilya, Member


5 of 5


Non-Executive/ Non-Independent

5 of 5

The Chairman of the Committee was not present at 35th Annual General Meeting of the Company since he was out of the Country on unavoidable engagements/circumstances in USA. The declaration for the same was received from him and he had requested Mr. S. Sandilya, Member of the Committee to be his authorised representative to respond to the queries, if any, of the Members with respect to functioning of the Nomination and Remuneration Committee at the 35th Annual General Meeting.

The Performance Evaluation criteria of Independent Director has been given elsewhere in this report.

3. Stakeholders Relationship Committee


• To approve requests for share transfer/transmission, issue of duplicate sharecertificates for shares reported lost,defaced or destroyed, as per the laiddown procedure;

• Toissueandallotrightshares/bonussharespursuant to a Rights/Bonus Issue subject tosuch approvals as may be required;

• To issue and allot shares on exercise ofStock options by Employees under variousESOP Schemes, subject to completion of allnecessary formalities;

• Toapproveandmonitordematerialisation/rematerialisation of shares and all mattersincidental thereto;

• Toauthorise theCompanySecretaryandRegistrar and Share Transfer Agent to

attend the matters relating to non-receipt of Annual reports, notices, non-receipt of declared dividend, change of address for correspondence, etc and to monitor action taken;

• To authorise the Company Secretary andRegistrar and Share Transfer Agent toattend to matters relating to transfer/transmission of shares, issue of duplicateshare certificates for shares reportedlost, defaced or destroyed, to issue newcertificates against subdivision of sharesand renewal, split or consolidation of sharecertificates;

• To monitor expeditious redressal ofgrievances including complaints relating totransfer/ transmission of shares, non-receiptof declared dividends/ Annual Reports, issueof duplicate certificates, general meetingsand other complaints;

• All other matters incidental or related toshares of the Company;

• Carryoutanyotherfunctionasmandatedby the Board from time to time and/orenforced by any statutory notifications,amendments as may be applicable.

(ii) Composition

The Chairman of the Committee is Mr. S.Sandilya. Other members are Mr. Ashank Desai,Mr. Sudhakar Ram, and Mr. Atul Kanagat. TheCompany Secretary acts as the Secretary to theCommittee.

During the year ended March 31, 2018 the Committee met 5 (five) times on April 19, 2017, July 18, 2017, October 25, 2017, January 17, 2018 and March 09, 2018. The attendance of the members at the meetings is stated below:

Name of the Members


Mr. S. Sandilya, Chairman


5 of 5


Non-Executive/Non Independent

5 of 5

Mr. Atul Kanagat, Member


4 of 5

Mr. Sudhakar Ram, Member

Executive/Non Independent

5 of 5

79Mastek Limited


Mr. Dinesh Kalani, Company Secretary has been designated as the “Compliance Officer” of the Company. He acted as Secretary to the Committee.

The details of investors’ complaints received and resolved during the year under review are as under:

No. of Investors’ Complaints received during the year 2017-18

No. of Investors’ Complaints resolved during the year 2017-18

No. of Investors’ Complaints pending as on March 31, 2018

NIL NA NIL

There were no pending transfers/grievances as on March 31, 2018.

4. Corporate Social Responsibility Committee (CSR)

The Company has constituted CSR Committee asrequired under Section 135 of the Companies Act,2013.

(i) Terms of reference

• Review the existing Corporate SocialResponsibility Policy and to make it morecomprehensive so as to indicate the activities to be undertaken by the Company asspecified in Schedule VII of the CompaniesAct, 2013;

• Decide CSR projects or programmes oractivities to be taken up by the company;

• Place before the board the CSR activitiesproposed to be taken up by the companyfor approval each year;

• Overseetheprogressoftheinitiativesrolledout under this policy on half yearly basis;

• Defineandmonitorthebudgetsforcarryingout the initiatives;

• SubmitareporttotheBoardofDirectorsonall CSR activities during the financial year;

• Monitorandreviewtheimplementationofthe CSR policy.

(ii) Composition

The Chairperson of the Committee is Ms. PritiRao. The other members are Mr. Sudhakar Ramand Mr. Ashank Desai. The Company Secretaryact as the Secretary to the Committee. Duringthe year ended March 31, 2018 the Committee

met 2 (Two) times on April 19, 2017 and October 25, 2017. The attendance of the members at the meeting is stated below:

Name of the Members


Ms. Priti Rao, Chairperson


2 of 2


Non-Executive/Non-Independent

2 of 2


Executive/Non-Independent

2 of 2

NON-MANDATORY COMMITTEE:

5. Governance Committee

(i) Terms of reference

• To develop and recommend to theBoard of Directors a set of corporategovernance principles applicable to theCompany, to review these principlesperiodically and to monitor compliancewith these principles;

• To review and approve new policiesrelating to corporate governance and toreview current policies and practices andrecommend improvements;

• To develop norms for evaluation of theBoard of Directors;

• Torecommendtheareasoftrainingneededfor Board members;

• To review the ongoing Business relatedissues and concerns;

• To review Enterprise Risk Management(ERM) Framework;

• Tooverseecompliancesof various InternalPolicies and Procedures;

• Toreviewongoinglegalcompliances,legalissues and related matters.

(ii) Composition

The Chairman of the Committee is Mr. AshankDesai. The other members are Mr. Sudhakar Ram, Ms. Priti Rao and Mr. Keith Bogg. The CompanySecretary act as the Secretary to the Committee.

During the year ended March 31, 2018 the Committee met 4 (four) times on April 19, 2017, July 18, 2017, October 25, 2017 and January 17, 2018.


The attendance of the members at the meetings is stated below:

Name of the Members


Mr. Ashank Desai, Chairman

Non-Executive/Non-Independent

4 of 4

Ms. Priti Rao, Member


4 of 4


Executive/Non-Independent

4 of 4

Mr. Keith Bogg, Member


4 of 4

IV. REMUNERATION OF DIRECTORS AND KEYMANAGERIAL PERSONNEL

The Nomination and Remuneration Committee hasdeveloped a policy which deals with the manner ofselection of Board of Directors and Key ManagerialPersonnel (KMP) and their remuneration. The relevantdetails are:

1. Pecuniary Relationship or Transactions with Non-Executive Directors.

Mr. Ashank Desai, Non-Executive Director was provided perquisites aggregating to ` 61,965/- during the yearended March 31, 2018 for rendering professionalservices.

The Shareholders at the 33rd Annual General Meeting of the Company held on August 17, 2015 had approved the payment of perquisites by enabling resolution which is valid up to June 30, 2018. The Board of Directors at their meeting held on April 18, 2018 and as per the recommendation received from Nomination and Remuneration Committee has proposed to continue to pay Mr. Ashank Desai as a Non-Executive Director, certain benefits/ Perquisites such as re-imbursement of telephone/mobile bills, credit card fees, premium for Mediclaim and Personal Accident Policy (including his family) etc., subject to the approval of the shareholder at the 36th Annual General Meeting, for a further period of 3 (three) years from July 01, 2018 till June 30, 2021, over and above the payment of sitting fees and eligible commission. The Monetary value for the said benefits/ perquisites shall not exceed ` 15 Lakhs per annum.

During the year, there were no pecuniary relationships or transactions between the Company and any of its Non-Executive/ Independent Directors apart from payment of sitting fees and/or Commission/perquisites as approved by the Shareholders.

2. Criteria of selection of Non-Executive Directors

• Non-ExecutiveIndependentDirectorsareexpectedto bring in objectivity and independence duringBoard deliberations around the Company’s Strategic approach, performance and risk management.They must also ensure very high standards offinancial probity and Corporate Governance.

• The Independent Directors are also expectedto commit and allocate sufficient time to meetthe expectations of their role as Non-ExecutiveIndependent Directors, to the satisfaction ofthe Board.

• ConflictofInterest:TheIndependentDirectorsarenot to involve themselves in situations which may, directly or indirectly conflict with the interests ofthe Company. It is accepted and acknowledgedthat they may have business interests, other thanthose of the Company. As a precondition to theirappointment as Independent Directors, they shallbe required to declare any such conflicts to theBoard, in writing at the time of their appointment and/or as and when there is any changes in thedirectorship and on yearly basis.

• Each IndependentDirector is issuedappointmentletter with clear guidelines on their roles, duties and responsibilities as Independent Director. The keyelements in which every Independent Director will be expected to contribute are: Strategy, Performance,Risk, People, Reporting and Compliance.

3. Remuneration Policy for the Directors and KeyManagerial Personnel (KMPs)

In determining the remuneration of Director and KMPsthe Nomination & Remuneration Committee shallensure / consider the following:

• While fixing the remuneration of Director and/or KMPs the Company shall consider industrybenchmarks and the competence of the personsand ensure that the level and composition ofthe remuneration is reasonable and sufficient toattract, retain and motivate them.

• The compensation structure of Director andKMPs will be benchmarked with industry salarytrends and will have components of fixed/basic salary as well as variable pay. The variablepay will be linked to business performanceparameters, as separately outlined in a VariablePay Plan guidelines.

81Mastek Limited


The Policy of the Company on Remuneration for Board of Directors, Key Managerial Personnel and Senior Management as required under Section 178 of the Companies Act, 2013, is available on Company’s website at https://www.mastek.com/corporate-governance.

There has been no change in the policy since last year. We affirm that the remuneration paid to the Directors and KMPs are as per the policy.

4. Remuneration of Directors

• Whilefixing the remunerationofDirectors, theCompany shall consider industry benchmarks and the competence of the persons and ensure thatthe level and composition of the remuneration isreasonable and sufficient to attract, retain andmotivate them.

• The Non-Executive Directors are being paidremuneration by way of Commission based onthe Net Profits of the Company, subject to amaximum of one percent (1%) of the Net Profitsof the Company, as may be approved by theBoard and the Shareholders, from time to time.

The Board of Directors decides and Shareholders approves the remuneration of Non-Executive Directors.

Details of Remuneration of Non-Executive Directors for the year ended March 31, 2018 are stated below:

Name Perquisites (`)

Commission Payable* (`)

Total (`)

Mr. Ashank Desai 61,965 - 61,965

Ms. Priti Rao - 6,00,000 6,00,000

Mr. S. Sandilya - 13,50,000 13,50,000

Mr. Atul Kanagat - 6,00,000 6,00,000

Mr. Keith Bogg - - -

Total 61,965 25,50,000 26,11,965

*Commission for financial year 2017-18 will be paid infinancial year 2018-19 and the Provision for the same hasbeen made in the accounts under review.

5. Criteria for payment of remuneration by way ofcommission to Non - Executive Directors

Subject to availability of profits, calculated underSection 197 read with Section 198 of the Companies Act, 2013, Non-Executive Directors of the Companyare also be entitled to commission and the samewill be paid taking into consideration the amount oftime spent on the critical policy decisions and higherdegree of engagement by the Members. The totalremuneration paid to all Non-Executive Directorswill have an upper limit of 1% of net profits of the

Company. (Sitting fees are excluded in the above calculation). The payment of remuneration by way of commission to Non-Executive Directors was approved by the shareholders at the 31st Annual General Meeting of the Company held on July 17, 2013 which was valid upto the year ending March 31, 2018.

Further, the Board of Directors of the Company at their meeting held on April 18, 2018 and as per the recommendation received from Nomination and Remuneration Committee proposed the payment of remuneration by way of Commission to Non-Executive Directors for further period of 5 (five) years from April 01, 2018 till March 31, 2023, a sum not exceeding 1 % (one percent) per annum of the net profits of the Company calculated in accordance with the provisions of section 198 of the Act, be paid to and distributed amongst the Non-Executive Directors of the Company (other than the Managing Director) in such amounts or proportions and in such manner and in all respects as may be directed by the Board of Directors and such payments shall be made in respect of the profits of the Company for each year.

Number of options/equity shares held by Independent Directors as on March 31, 2018:

Name of the Directors

No. of Options Granted before

enactment of Companies Act,

2013

No. of Options

Exercised

No. of Equity Shares

Held

Ms. Priti Rao 29,600 29,600 29,600

Mr. S. Sandilya 26,000 26,000 26,000

Mr. Atul Kanagat* 24,600 24,600 NIL

Mr. Keith Bogg NIL NIL NIL

Note: No Stock Options were granted to Mr. Sudhakar Ram,Mr. Ashank Desai and Mr. Keith Bogg.

* Outstanding Options since exercised and shares alloted onApril 17, 2018.

All the Stock Options were in terms of ESOP Plans.

Number of equity shares held by other Directors as on March 31, 2018:

Name of the Directors No. of Equity Shares Held

Mr. Ashank Desai- along with his family members

34,07,952 (14.38%)

Mr. Sudhakar Ram along with his family members (including private family trust)

28,58,608 (12.09%)


6. Remuneration of Vice Chairman & ManagingDirector:

The Remuneration paid to Mr. Sudhakar Ram - ViceChairman & Managing Director, is given in notes toAccounts. The details are as follows:

Sr. No.

Particulars of Remuneration Amount in `

1. Gross salary 70,36,800

2. Stock Option NIL

3. Sweat Equity NIL

4. - Commission NIL

5. Others, please specify (Perquisites) 39,600

6. Contribution to Provident Fund & Other Fund

8,44,416

7. Performance Bonus* 15,00,000

Total 94,20,816

* Performance Bonus/ Award for the financial year 2017-18will be paid in financial year 2018-19 and the provision forthe same has been made in the accounts under review.

Note: Performance Bonus of Rs.19 Lacs for the Financial Year 2016-17 which was recommended subsequent to the finalisation of previous year annual accounts was paid to Mr. Sudhakar Ram in the current financial year for which the provision for the payment of performance bonus was already made in the previous financial year 2016-17 but paid in the current financial year under review, hence not included in current year remuneration and it was within the overall

ceiling limit of Previous Year.

An Employment Agreement was entered between the Company and Mr. Sudhakar Ram for re-appointing him as Vice- Chairman & Managing Director of the Company for a period of 3 (three) years i.e. from July 01, 2017 to June 30, 2020, the re-appointment was approved by the Shareholders at 35th Annual General Meeting of the Company. The said Employment Agreement can be terminated by either party by giving three months’ notice to the other party.

7. Sitting Fees paid to Non-Executive Director:

With effect from April 01, 2017, the sitting feesfor Non-Executive Director was revised and fixed at` 1,00,000 for each of the meetings of Board, AuditCommittee, Nomination & Remuneration Committeeand Governance Committee and ` 50,000 for each ofthe meetings of Stakeholders Relationship Committeeand Corporate Social Responsibility Committee.

The details of the Sitting fees paid to each Non-Executive Director for the financial year under review is as follows:

Name Sitting Fees (`)

Mr. Ashank Desai 21,50,000

Ms. Priti Rao 14,00,000

Mr. S. Sandilya 16,50,000

Mr. Atul Kanagat 14,00,000

Mr. Keith Bogg 13,00,000

Total 79,00,000

V. GENERAL BODY MEETINGS

(i) Particulars of Annual General Meetings held & Special Resolution passed during the last three years:

Financial Year

Date Time Location Special Resolutions Passed

2016-17 June 22, 2017 11.00 A.M Ahmedabad Management Association, H.T. Parekh Hall, Ahmedabad- 380015

• Re-appointmentofMr.SudhakarRamasVice-Chairman&Managing Director of the Company for a period of 3 yearsfrom July 01, 2017 up to June 30, 2020 and remuneration tobe paid to him.

• EnablingResolutionforgivingloansandguaranteesandmakeinvestment in securities. (` 250 Crs.)

• EnablingResolutionforCreationofCharge/MortgageontheAssets of the Company, both present and future. (` 250 Crs.)

• EnablingResolutionforborrowingstobemadebytheCompany. (` 250 Crs.)

2015-16 July 25, 2016 11.00 A.M Ahmedabad Management Association, H.T. Parekh Hall, Ahmedabad- 380015

• SubstitutionofthenexistingArticlesofAssociationoftheCompany with the new set of Articles of Association due tothe requirements of Companies Act, 2013

2014-15 August 17, 2015

11.00 A.M Ahmedabad Management Association, H.T. Parekh Hall, Ahmedabad- 380015

• Paymentofcertainbenefits/PerquisitestoMr.AshankDesai-Non-Executive Director for 3 years (` 15 Lacs)

All the resolutions as set out in the notices were passed with requisite majority by the members of the Company.

83Mastek Limited


(ii) Details of Resolution passed through Postalballot, the person who conducted the postalballot exercise and details of the voting pattern:

During the year under review, no resolution has beenpassed through the exercise of postal ballot. As ondate, the Company does not have any proposal topass any resolution by way of postal ballot.

VI. MEANS OF COMMUNICATION

1. Extract of the Quarterly/ Half yearly/ Annual resultssubjected to Limited Review/ Audit Report byStatutory Auditors are generally published in the FreePress Journal (English) and Navshakti Times (Marathi)at Mumbai and in Financial Express Ahmedabad(Gujarati). The Quarterly/ Half yearly/ Annual, Un-audited/ Audited Financial Results along with the PressReleases and Analyst Presentation are made availableon the website of the Company at https://www.mastek.com/financial-information. Other informationrelating to Shareholding Patterns, compliance withthe requirements of corporate governance etc. areuploaded on BSE/NSE website and on Mastek’s website at https://www.mastek.com/investor-information

2. Official news releases and transcripts of conferencecalls with the analysts after the quarterly results aredisplayed on the Company’s website at https://www.mastek.com/financial-information. The Companyhas disclosed and complied with all the mandatoryrequirements as stipulated in SEBI Listing Regulations.The details of these compliances have been givenabove in the relevant sections of this report.

3. The Presentations, Intimations of analyst or institutional investors meet are also uploaded on the Company’swebsite at https://www.mastek.com/investor-information as well as sent to the Stock Exchanges.No unpublished price sensitive information or futurefinancial projections are discussed in presentationsmade to institutional investors and financial analysts.

4. NSE Electronic Application Processing System (NEAPS)and BSE’s Listing Centre is a web-based applicationdesigned by NSE and BSE respectively for corporatesand are used for periodical compliance filings likequarterly results, shareholding pattern, corporategovernance report, media releases, statement ofinvestor complaints, among others and are filedelectronically on the BSE’s Listing Centre at http://listing.bseindia.com, and NEAPS portal at www.connect2nse.com.

5. SEBI Complaints Redress System (SCORES): Theinvestor complaints are processed in a centralised

web-based complaints redress system. The salient features of this system are: Centralised database of all complaints, online upload of Action Taken Reports (ATR) by concerned companies and online viewing by investors of actions taken on the complaint and its current status.

Communication with the Members/ Shareholders

• The unaudited quarterly / half yearly and annualaudited results are announced generally within thirtydays from the close of the quarter and financial yearrespectively which is within the requirements of theSEBI Listing Regulations. The aforesaid financial resultsare sent to/uploaded on website of BSE Limited (BSE)and The National Stock Exchange of India Limited(NSE) where the Company’s securities are listed,immediately after these are approved by the Board.The results are thereafter given by way of a PressRelease to various news agencies/ analysts and arepublished within forty- eight hours in leading Englishand Gujarati/Marathi daily newspapers. The auditedfinancial statements forms a part of the Annual Reportwhich is sent to the Members well in advance of theAnnual General Meeting.

• The Company also informs byway of intimation toBSE and NSE all price sensitive matters or such othermatters, which in its opinion are material and ofrelevance to the members including Press Release andCredit Rating.

• The Annual Report of the Company, the quarterly/ half yearly and the annual results and the pressreleases of the Company are also placed on theCompany’s website: https://www.mastek.com/financial-information and can be downloaded.

• AseparatededicatedsectionunderUnpaidDividendson the Company’s website gives information onunclaimed dividends and also equity shares transferredto IEPF Authority for those shareholder who had notclaimed their unpaid dividend for last consecutiveseven years, https://www.mastek.com/investor-information.

Codes and Policies

The Board has adopted all applicable codes and policies as per the requirement of the Companies Act, 2013, SEBI (Prohibition of Insider Trading) Regulations, 2015 and SEBI Listing Regulations. The requisite codes and policies are posted on the Company’s website at www.mastek.com and references to these codes and policies have been given elsewhere in this report.


VII. GENERAL SHAREHOLDER INFORMATION:

1. ANNUAL GENERAL MEETING: -

Date and Time : Thursday, July 19, 2018 at 11.00 a.m.

Venue : H.T. Parekh Auditorium, AMA Complex, ATIRA. Dr. Vikram Sarabhai Marg, Ahmedabad 380015, Gujarat

2. FINANCIAL YEAR AND TENTATIVE CALENDAR:

The Company follows the period of 1st April to 31st March, as the Financial Year.

Financial reporting for the quarters ending –June 30, 2018 around July 18, 2018September 30, 2018 around October 25, 2018December 31, 2018 around January 17, 2019March 31, 2019 around April 17, 2019

3. BOOK CLOSURE DATE: Friday, July 13, 2018 to Thursday, July 19, 2018 (both days inclusive)

4. DIVIDEND PAYMENT DATE:

Final dividend payment of ` 4/- per equity share (face value of ` 5/- each) (@80%) will be paid within 15 days from the dateof the Annual General Meeting subject to the approval of the Members at the ensuing Annual General Meeting.

5. LISTING OF SHARES AND STOCK CODE:

The equity shares having a face value of ` 5/- each are listed at the following Stock Exchanges:

Name of Exchange Script Code Reuters Bloomberg ISIN

BSE LimitedPhiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001.

523704 MAST.BO MAST:IN INE759A01021

National Stock Exchange of India LimitedExchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051.

MASTEK MAST.NS NMAST:IN

6. LISTING FEES TO STOCK EXCHANGES AND ANNUAL CUSTODY FEES TO DEPOSITORIES:

All the Listing fees and the Custody fees has been paid upto March 31, 2017.

The Company will pay on or before the due date annual listing fees for the financial year 2018-2019 to the Stock Exchangeswhere the Company’s shares are listed. The Company will also pay on or before the due date Annual Custody Fees for thefinancial year 2018-19 to both the depositories namely National Securities Depository Limited (NSDL) and Central DepositoryServices (India) Limited (CDSL).

7. CAPITAL STRUCTURE:

Authorised Capital Equity ` 200,000,000/- (40,000,000 Equity shares of ` 5/- each)Preference ` 200,000,000/- (20,00,000 Preference shares of ` 100/- each)

Issued, Subscribed and Paid-up Capital ` 11,84,60,280 (2,36,92,056 Equity Shares of ` 5/- each)

8. DISTRIBUTION OF SHAREHOLDING

Distribution of Shareholding as on March 31.

Range no. of shares

2018 2017

Shareholder Numbers

% No. of shares

% Shareholder Numbers

% No. of shares

%

1 - 500 17,293 88.46 15,00,785 6.33 18,298 88.46 17,04,485 7.29

501 - 1000 1,171 5.99 8,81,862 3.72 1,142 5.52 9,10,908 3.9

1001 - 5000 805 4.12 16,87,923 7.12 1,003 4.85 20,90,136 8.94

5001 - 10000 121 0.62 8,97,455 3.79 110 0.53 7,74,044 3.31

10001 - above 159 0.81 1,87,24,031 79.04 131 0.64 1,78,97,960 76.56

TOTAL: 19,549 100.00 2,36,92,056 100.00 20,684 100.00 2,33,77,533 100.00

85Mastek Limited


9. MONTHLY VOLUMES AND PRICES: FINANCIAL YEAR 2017-18

Month and Year BSE Limited National Stock Exchange of India LimitedHigh (`) Low (`) Volume

(Total Traded Quantity)

High (`) Low (`) Volume (Total Traded Quantity)

April 2017 290.00 178.00 38,13,118 289.90 178.00 1,80,75,164May 2017 363.10 260.05 27,68,285 364.00 261.65 1,09,06,777June 2017 307.00 246.00 10,84,295 307.65 245.10 42,60,490July 2017 397.50 263.30 45,96,286 397.90 262.55 2,28,77,609August 2017 311.00 241.10 27,45,786 310.85 231.00 1,11,11,791September 2017 315.00 270.00 11,22,175 314.70 272.50 49,38,692October 2017 372.00 284.20 22,78,045 373.50 284.05 1,21,24,055November 2017 402.00 284.20 18,68,186 401.70 340.25 73,86,716December 2017 415.00 355.25 14,68,204 415.60 355.10 65,15,811January 2018 515.00 366.20 27,62,546 511.30 366.55 1,45,92,135February 2018 532.00 410.85 16,14,707 531.05 410.20 73,62,615March 2018 603.00 459.45 22,79,493 603.75 459.60 1,32,08,937

Source: BSE Limited (www.bseindia.com) and National Stock Exchange of India Limited (www.nseindia.com)

10. MASTEK SHARE PRICE PERFORMANCE VERSUS NSE’s S&P CNX 500

Relative Price Performance Mastek v/s NSE’s S&P CNX 500

3403102802502201901601301007040

Apr

/17

May

/17

May

/17

Jun/

17

Jul/1

7

Aug

/17

Sep/

17

Oct

/17

Nov

/17

Dec

/17

Jan/

18

Feb/

18

Mar

/18

Mastek S&P CNX 500 NSE IT

Source: BSE Limited (www.bseindia.com) and National Stock Exchange of India Limited (www.nseindia.com)

11. SHARE TRANSFER SYSTEM / UNCLAIMEDDIVIDEND AND OTHER RELATED MATTERS

i. Registrar and Share Transfer Agent:

All inquiries relating to the shareholder records,share transfers, transmission of shares, changeof address, non-receipt of dividend, loss of sharecertificates, transfer of shares to IEPF Authorityetc. should be addressed to:

The Registrar and Share Transfer Agent:Karvy Computershare Private LimitedUnit: Mastek LimitedAddress: Karvy Selenium, Tower B, Plot No.31-32, Gachibowli, Nanakramguda, FinancialDistrict,Hyderabad–500032,Telangana.Tel.: +91-040-6716-2222;Fax: +91-040-2342-0814Toll Free no.: 1800-345-4001E-mail: [email protected]

ii. Share Transfer System:The Company processes shares sent for transfer,transmission, transposition, etc. every month.Transfers/ transmissions which are completein all respects are registered and returnedwithin 15 days of lodgement. The Companyhas obtained the half yearly certificate fromIndependent Company Secretary in Practice fordue compliance of share transfer formalities asper the requirements of Regulation 40(9) of SEBIListing Regulations and a half yearly certificateduly signed by the Compliance Officer of theCompany and the authorised representative ofRTA as per the requirements of Regulation 7(3)of SEBI Listing Regulations.

iii. Nomination facility for shareholdersAs per the provisions of the CompaniesAct, 2013, facility for making nomination is


available for Members in respect of shares held by them. Members holding shares in physical form may obtain nomination form, from the RTA of the Company. Members holding shares in dematerialised form should contact their Depository Participants (DP) in this regard.

iv. Permanent Account Number (PAN)

Members who hold shares in physical form areadvised that SEBI has made it mandatory thata copy of the PAN card of the transferee/s,members, surviving joint holders / legal heirs befurnished to the Company while obtaining theservices of transfer, transposition, transmissionand issue of duplicate share certificates.

v. Unclaimed Dividend

Pursuant to provisions of Section 125 of theCompanies Act, 2013 (the Act) the amount ofDividend which has remained unclaimed andunpaid for a consecutive period of seven yearsfrom the date of transfer of such amount tounpaid dividend account is required to betransferred to Investors Education and ProtectionFund (IEPF) established by Central Government.Accordingly, the unclaimed dividend pertainingto Final Dividend for the year 2009-10 oncompletion of seven years has been creditedto IEPF during the year. All the members whohave not encashed the dividend warrantssince financial year 2012-13 & thereafter arerequested to take steps to contact the Registrarand Share Transfer Agent of the Company.

Particulars/ Financial year Date of Declaration Date of Payment Tentative dates for transfer to IEPF

Final Dividend 2012-2013 July 17, 2013 July 22, 2013 August 22, 2020

Interim Dividend 2013-2014 October 24, 2013 November 11, 2013 November 29, 2020

Final Dividend 2013-2014 July 23, 2014 July 28, 2014 August 28, 2021

Interim Dividend 2014-2015 January 22, 2015 February 7, 2015 February 27, 2022

Final Dividend 2014-2015 August 17, 2015 August 28, 2015 September 23, 2022

1st Interim Dividend 2015-2016 January 14, 2016 February 4, 2016 February 19, 2023

2nd Interim Dividend 2015-2016 March 12, 2016 March 29, 2016 April 17, 2023

Interim Dividend 2016-2017 October 18, 2016 November 9, 2016 November 23, 2023

Final Dividend 2016-17 June 22, 2017 July 10, 2017 July 28, 2024

Interim Dividend 2017-18 October 26, 2017 November 15, 2017 December 02, 2024

vi. Transfer of Concerned Equity Shares toInvestor Education and Protection FundAuthority (IEPF Authority)Pursuant to the provisions of Section 124 and 125 of the Companies Act and the Investor Educationand Protection Fund Authority (Accounting,Audit, Transfer and Refund) Rules, 2016, andamendments made thereunder all the concernedshares in respect of which dividend had notbeen claimed or remained unpaid for sevenconsecutive years or more had been transferredby the Company in the name of InvestorEducation and Protection Fund Authority (“IEPFAuthority”) in their Demat Account in November,2017 and January, 2018.

The Company had identified and initiated theshare transfer process with Depositories as andtransferred 48,285 shares in November, 2017and 7,033 shares in January, 2018 (due to betransferred to IEPF based on Interim Un-PaidDividend of year 2009-10 and Final Un-PaidDividend of year 2009-10 in November 2017 andJanuary, 2018 respectively) to Investor Education

and Protection Fund Authority Demat Account to comply with the said Rules. The List of shares transferred to IEPF Authority is available on the Company’s website at https://www.mastek.com/investor-information

In case the shareholders have any queries on the subject matter and the Rules, they may contact the Company’s Share Transfer Agent, Karvy Computershare Private Limited. The Members / claimants whose shares, unclaimed dividend, etc. have been transferred to IEPF may claim the shares and unclaimed dividend or apply for refund by making an application to IEPF Authority in IEPF Form-5 (available on www.iepf.gov.in). The Member / claimant can file only one consolidated claim in a financial year as per the IEPF Rules. It is in the Members interest to claim any un-encashed dividends, and for future, to consider dematerialisation of their shares and opt for Automated Clearing House (ACH) mode, so that dividends paid by the Company are credited to the investor’s account on time.

87Mastek Limited


vii. Pending Investor Grievances

Any Member / Investor whose grievance hasnot been resolved satisfactorily, may kindly writeto the Company Secretary at the Registered/Corporate Office with a copy of the earliercorrespondences for quick resolution.

viii. Reconciliation of Share Capital Audit

As required under Regulation 55A of the Securities & Exchange Board of India (Depositories andParticipants) Regulation, 1996 quarterly audit ofthe Company’s share capital is being carried outby a Independent Company Secretary in Practicewith a view to reconcile the total Share capitaladmitted with National Securities DepositoryLimited (NSDL) and Central Depository Services(India) Limited (CDSL) and held in physical form,with the issued and listed capital. The Certificatein regard to the same has been submitted toBSE Limited and The National Stock Exchange ofIndia Limited and is also placed before the Boardof Directors.

ix. Payment of Dividend through AutomatedClearing House (ACH)

The Company provides the facility for directcredit of the dividend to the Members BankAccount. SEBI Listing Regulations also mandate

Companies to credit the dividend to the Members electronically. Members are therefore urged to avail of this facility to ensure safe and speedy credit of their dividend into their Bank account through the Banks’ “Automated Clearing House” mode. Members who hold shares in demat mode should inform their Depository Participant, whereas Members holding shares in physical form should inform the Company of the core banking account details allotted to them by their bankers. In cases where the core banking details are not available with the Company, then the Company will issue physical demand draft to the Members.

x. Green Initiatives for sending communication

Ministry of Corporate Affairs (MCA), Govt. ofIndia has issued circular No. 17/2011 datedApril 21, 2011 and circular No. 18/2011 datedApril 29, 2011 in respect of Green Initiative.Accordingly, Company send a communicationthrough Annual Reports to all the membersrequesting them to give their E-mail ID’s to theirDepository Participants (DPs), so that Annualreport and other communications can be sentelectronically to all the members. Members, whohave so far not informed the E-mail ID’s to theirDP’s, are requested to do the same in the interestof environment.

12. SHAREHOLDING PATTERN AS AT MARCH 31

Sr. No.

Category 2018 2017

No. of Shares % of Holding No. of Shares % of Holding

1 Indian Promoters 1,11,53,660 47.08 1,15,06,660 49.22

2 Financial Institutions /Banks & Insurance Companies 12,88,806 5.44 8,22,243 3.52

4 Insurance Companies - - 1,121,532 4.80

5 FII’s 25,97,101 10.96 17,44,180 7.46

6 Bodies Corporate 18,09,154 7.64 10,88,597 4.66

7 Resident Individuals 64,78,929 27.35 64,82,617 27.72

8 NRIs 3,09,088 1.30 6,11,704 2.62

10 Investor Education and Protection Fund Authority (IEPF) 55,318 0.23 - -

Total 2,36,92,056 100.00 2,33,77,533 100.00

DEMATERIALISATION OF SHARES:

DETAILS OF SHARES HELD IN PHYSICAL & ELECTRONIC MODE

About 99.33 % of total equity share capital is held in dematerialised form with NSDL and CDSL as on 31st March, 2018.

As on Date Status of Shares - Physical versus Electronic mode

Physical Electronic Total

March 31, 2018 1,58,953 (0.67%) 2,35,33,103 (99.33%) 2,36,92,056

March 31, 2017 2,17,606 (0.93%) 2,31,59,927 (99.07%) 2,33,77,533


13. SHAREHOLDERS WITH MORE THAN 1% SHAREHOLDING AS ON MARCH 31 (OTHER THAN PROMOTERS)

Sr. No

Name of the shareholder 2018 2017No. of shares

Shares as percentage of

total no. of shares

No. of shares

Shares as percentage of

total no. of shares1 KIFS TRADE CAPITAL PRIVATE LIMITED 3,92,000 1.65 NA NA2 IDFC CLASSIC EQUITY FUND 3,12,016 1.32 NA NA3 IDFC TAX ADVANTAGE (ELSS) FUND 3,10,000 1.31 2,70,000 1.154 GLOBEFLEX EMERGING MARKETS SMALL CAP, L.P. 2,96,000 1.25 NA NA5 FIDELITY PURITAN TRUST-FIDELITY LOW-PRICED STOCK FUND NA NA 10,00,000 4.286 LIFE INSURANCE CORPORATION OF INDIA P & GS FUND NA NA 5,89,781 2.527 LIFE INSURANCE CORPORATION OF INDIA NA NA 5,18,435 2.228 IDFC CLASSIC EQUITY FUND NA NA 3,61,188 1.559 MAVEN INDIA FUND NA NA 3,00,000 1.28

14. INFORMATION FOR SHAREHOLDERS ON THEWEBSITE:

The Company actively communicates it’s strategyand the developments of its business to the financialmarkets. The Senior Executives of the Companyalong with M/s. Christensen Investor Relations (I)Private Limited - our Investor advisor regularly meetthe analysts. The Press release, Analysts’ conferencecalls are organised by M/s. Christensen. Decisions insuch meetings are always limited to information thatis already in the public domain. Please access thehomepage at http://www.mastek.com and registeryourself for regular updates.

15. OUTSTANDING GDRs/ADRs/WARRANTS OR ANYCONVERTIBLE INSTRUMENTS:

There are no outstanding GDRs/ADRs/warrantsexcept the stock options granted to the employeesof the Company and its subsidiaries. However,the outstanding ESOP options after vesting, whenexercised, shall increase the equity share capital of theCompany to that extent .

16. OFF-SHORE DEVELOPMENT CENTERS:

The Company has Off-Shore Software DevelopmentCenters at SEEPZ - Mumbai, Millennium Business Park- Mahape, Pune, Noida, Gurgaon and Chennai. The fulladdress of the Company’s centres / offices is availableelsewhere in the Annual Report.

17. COMPLIANCE OFFICER OF THE COMPANY/ADDRESS FOR CORRESPONDENCE:

Name Dinesh Kalani, Company Secretary

Address for correspondence

Mastek Limited, #106/107, SDF-IV, SEEPZ, Andheri (East), Mumbai - 400 096 Phone No: + 91-22-6722-4200 Fax: +91-22-6695-1331

E mail [email protected]

18. FOREIGN EXCHANGE RISK AND HEDGINGACTIVITIES:

Company is exposed to foreign exchange risk onaccount of import and export transactions entered.The Company is proactively mitigating these risks byentering into commensurate hedging transactionswith banks as per applicable guidelines and group riskmanagement instructions. Please refer notes to theFinancial Statements in this regard.

19. INVESTOR INFORMATION

A. COMPANY OVERVIEW:

Mastek is a publicly held leading IT player withglobal operations providing enterprise solutions togovernment, retail and financial services organisationsworldwide. With its principal offshore delivery facilitybased at Mumbai, India, Mastek also operates in theUK and USA and Indian market regions. Incorporatedin 1982, Mastek has been at the forefront oftechnology and has made significant investmentsin creating intellectual property, which along withproven methodologies and processes, increase ITvalue generation to its customers through onsiteand offshore deliveries. The Company is a providerof vertically-focused enterprise technology solutions.The Company’s offering portfolio includes businessand technology services comprising of ApplicationDevelopment, Application Maintenance, BusinessIntelligence and Data Warehousing, Testing &Assurance, Digital Commerce, Agile Consulting andLegacy Modernisation. The Company carries out itsoperations in India and has its software developmentcenters in India at Mumbai, Pune, Chennai andMahape. The Company was promoted by Mr.Ashank Desai, Mr. Ketan Mehta, Mr. RadhakrishnanSundar and Mr. Sudhakar Ram. Mastek had its InitialPublic Offering (IPO) in December, 1992 and raised` 422.1 lakhs in gross aggregate proceeds. There wasan additional public offering in March 1996 when itraised ` 720 lakhs in gross aggregate proceeds.

89Mastek Limited


B. ISSUE OF EQUITY SHARES HISTORY: Number of shares

Prior to Initial Public offer 23,97,000 shares of ` 10/- eachInitial Public Offer in December, 1992 6,03,000 shares of ` 10/- eachIssued under Employees’ Stock Option Plan till 1996 56,640 shares of ` 10 eachSecond Public Offer in March, 1996 4,00,000 shares of ` 10/- eachBonus Shares in January, 2000 (1:1) 34,56,640 shares of ` 10/- eachAdjusted the above in view of Sub-Division of shares of ` 10/- each into two shares of ` 5/- each in 2001.

1,38,26,560 shares of ` 5/- each

Issued under Employees’ Stock Option Plans in Financial Year 2000-01 57,083 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2001-02 85,396 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2002-03 1,44,882 shares of ` 5/- eachBuy-Back and Extinguishment of shares in Financial Year 2003-04 3,00,898 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2003-04 66,913 shares of ` 5/- eachBuy-Back and Extinguishment of shares in Financial Year 2004-05 98,950 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2004-05 88,412 shares of ` 5/- eachBonus Shares issued in April, 2006 (1:1) 1,40,54,594 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2005-06 2,13,642 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2006-07 3,26,547 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2007-08 76,115 shares of ` 5/- eachBuy-Back and Extinguishment of shares in Financial Year 2007-08 9,15,714 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2008-09 19,293 shares of ` 5/- eachBuy-Back and Extinguishment of shares in Financial Year 2008-09 7,44,381 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2009-10 44,443 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2010-11 7,250 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2011-12 75,000 shares of ` 5/- eachBuy-Back and Extinguishment of shares in Financial Year 2012-13 23,88,000 shares of ` 5/- eachBuy-Back and Extinguishment of shares in Financial Year 2013-14 24,84,007 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2013-14 6,500 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2014-15 3,85,992 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2015-16 4,50,602 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2016-17 3,80,259 shares of ` 5/- eachIssued under Employees’ Stock Option Plans in Financial Year 2017-18 3,14,523 shares of ` 5/- each

VIII. OTHER DISCLOSURES

1. Related Party Transactions

All the transactions entered into with RelatedParties (RP’s) as defined under the CompaniesAct, 2013 and Regulation 23 of the SEBI ListingRegulations during the financial year were inthe ordinary course of business and are onan arm’s length pricing or fair value basis anddo not attract the provisions of Section 188of the Companies Act, 2013. There were notransactions with related parties during thefinancial year which were in conflict with theinterest of the Company. Suitable disclosureas required by the Indian Accounting Standard(Ind AS-24) has been made in the notes tothe Financial Statements. There were nomaterially significant transactions with RelatedParties during the financial year. Related party

transactions have been disclosed under the notes forming part of the financial statements in accordance with Indian Accounting Standard (Ind AS-24). A statement in summary form of transactions with Related Parties in ordinary course of business and on an arm’s length basis is periodically placed before the Audit Committee for review and recommend to the Board for their approval. As required under Regulation 23(1) of the SEBI Listing Regulation, the Company has formulated a policy on dealing with Related Party Transactions. None of the transactions with Related Parties were in conflict with the interest of the Company. The Board has approved a policy for related party transactions which has been uploaded on the Company’s website at http://www.mastek.com/corporate-governance.


2. Subsidiary Companies

The Company has a policy on Material Subsidiaryand the same is placed on the website of theCompany at http://www.mastek.com/corporate-governance.

The Un-Audited/ Audited Annual Financial Statements of Subsidiary Companies including overview of financials and investments are placed / tabled at the Audit Committee and Board Meetings and same are placed on the website of the Company https://www.mastek.com/financial-information. The copies of the Minutes of the Board Meetings of Subsidiary Companies are circulated to all the Directors and are tabled at the Board Meetings.

3. Strictures and Penalties

No strictures or penalties have been imposed onthe Company by the Stock Exchanges or by theSecurities and Exchange Board of India (SEBI) orby any statutory authority on any matters relatedto capital markets during the last three years.

4. Compliance with Accounting Standards /IND AS

First-time adoption of Indian AccountingStandard (Ind AS):

The Consolidated and Standalone Financial Statements have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016, as applicable. please note that the Company has transitioned to Indian Accounting Standard (Ind AS) with effect from April 01, 2017. Accordingly, the impact of transition has been provided in the opening reserves as at April 01, 2016 and figures for the financial year ended March 31, 2017 have been restated accordingly. For all the periods upto the year ended March 31, 2017, the Company/Group had earlier prepared and presented its financial statements in accordance with Accounting Standards notified under section 133 of the Companies Act 2013 (Indian GAAP). The financial statements for the financial year ended March 31, 2018 are the first financial with comparatives, prepared under Ind AS. The adoption was carried out in accordance with Ind AS 101, First Time adoption of Indian Accounting Standards. The transition was carried out from

Indian Accounting Principle generally accepted in India as prescribed under Section 133 of the Act read with the Rule 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP), which was the previous GAAP. Reconciliations and description of the effect of the transition to Ind AS from Indian GAAP is given in Note 33 of the Consolidated Financial Statement and Note 32 of the Standalone Financial Statement.

All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the consolidated/standalone financial statements under both Ind AS and Indian GAAP as of the Transition Date have been recognised directly in equity at the Transition Date. In preparing the financial statements, the Company has availed itself of certain exemptions and exceptions in accordance with Ind AS 101. Financial results for all the periods presented have been prepared in accordance with the recognition and measurement principles of IND AS 34, Interim Financial Reporting.

5. Internal Control System

The Company has a formal system of internalcontrol testing which examines both the designeffectiveness and operational effectiveness toensure reliability of financial and operationalinformation and all statutory / regulatorycompliances. The Company’s business processesare on SAP platform and has a robust monitoringand reporting process resulting in financialdiscipline and accountability.

6. Code of Conduct

The Board of Directors has approved a Code ofConduct which is applicable to the Members ofthe Board and concerned senior employees. TheCode has been posted on the Company’s website http://www.mastek.com/corporategovernance.The Code lays down the code of conduct whichis expected to be followed by the Directors andthe designated employees in their businessdealings and in particular on matters relating tointegrity in the work place, in business practicesand in dealing with stakeholders. The Code givesguidance through examples on the expectedbehaviour from an employee in a given situationand the reporting structure. All the BoardMembers and the Senior Managerial Personnelhave confirmed about their compliance with theCode during the year.

91Mastek Limited


7. Vigil Mechanism / Whistle Blower Policy

In staying true to our values of Strength,Performance and Passion and in line withour vision of being one of the most respectedcompanies in India, the Company is committedto the high standards of Corporate Governanceand stakeholder responsibility. The Companyhas a Whistle Blower Policy to deal withinstances of fraud and mismanagement, if any.The Policy ensures that strict confidentiality ismaintained whilst dealing with concerns andalso that no discrimination will be meted outto any person for a genuinely raised concern.Pursuant thereto, a dedicated hotline is provided(+91-22) 6791-4675 which can be directlyreached and any Whistle Blower’s complaint canbe registered. Calls to the Hotline during workhours will be directed by the Operator to any ofthe Ombudspersons or Compliance Committeemembers, as desired by the caller. Complainantscan also raise their concern through e-mails tothe Ombudspersons or Compliance Committeemembers or Chairperson of Audit Committee(if the complaint is against a Director or by aDirector). If, for any reason, the Complainantdoes not wish to write to any of these entities,he/she can write to [email protected] addressed to this ID will be received by theCompany Secretary, who will appropriately directit to any of the Ombudspersons or ComplianceCommittee member/s or Chairperson of theAudit Committee, after ascertaining the nature,identity and sensitivity of the concern raised.

8. Prevention of Insider Trading

As per SEBI (Prohibition of Insider Trading)Regulation, 2015, the Company has adopteda Code of Conduct for Prevention of InsiderTrading and the same has been posted on theCompany’s website - https://www.mastek.com/corporate-governance. All the Directors,concerned Senior employees, third parties suchas statutory auditors, Investor Relation Agency,Consultants etc. who could have access to theunpublished price sensitive information of theCompany are governed by this code. The tradingwindow is closed during the time of declarationof results and occurrence of any material eventsas per the code. The Company has appointed Mr.Dinesh Kalani, Company Secretary as Compliance Officer, who is responsible for setting forthprocedures and implementation of the code fortrading in Company’s securities. During the yearunder review there has been due compliancewith the said code.

The Code requires pre-clearance for dealing in the Company’s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information (UPSI) in relation to the Company and during the period when the Trading Window is closed. The Company Secretary notifies by an e-mail to all Promoters, Directors, Key Managerial Personnel, Senior Management and concerned third parties such as Statutory Auditors, Investor Relation Agency, Consultants and other concerned personnel and connected employees who may be in possession of price sensitive information about trading window closure. All Board Members and the designated employees have confirmed compliance with the Code. The Code of Conduct for Prevention of Insider Trading code was amended by the Board of Directors at its meeting held on October 26, 2017 by amending the clause for Window Closure starting from last day of any fiscal quarter of the Company and will continue till the forty-eight hours after the disclosure of such financial results/information made to the Stock Exchanges. The Company also internally reviewed and strengthened the UPSI and its distribution access process and are strictly distributed on “need to know basis”.

9. The Company has its own functional websitewww.mastek.com as required by the SEBIListing Regulations, where information aboutthe Company, quarterly and annual auditedfinancial results, annual reports, distributionof shareholding at the end of each quarter,official press releases, information required tobe disclosed under Regulation 30(8) and 46 ofthe SEBI Listing Regulations, etc. are regularlyupdated. All material events/informationrelating to the Company that could influencethe market price of its securities or investmentdecisions are timely disclosed to the StockExchanges as per the Company’s Policyon determination of materiality of eventsframed under the SEBI Listing Regulations. Alldisclosures under this policy are also displayedon the Company’s website and hosted for aminimum period of five years and thereafteras per the Archival Policy of the Company.The Policy on determination of materiality ofevents and Archival Policy of the Company isavailable on the Company’s website at www.mastek.com.


IX. COMPLIANCES WITH CORPORATE GOVERNANCEDISCLOSURE REQUIREMENTS AS SPECIFIED INSEBI LISTING REGULATIONS

The Company is in compliance with all mandatoryrequirements as per Regulation 17 to 27 and sub-regulation (2) of Regulation 46 of SEBI ListingRegulation. Generally, there were no instances ofnon-compliance on any matter related to the capitalmarkets.

X. MANAGEMENT DISCUSSION & ANALYSIS:

This forms part of the Annual Report and annexedelsewhere in this Report.

XI. COMPLIANCE WITH NON-MANDATORY/DISCRETIONARY REQUIREMENTS

Among the adoption of Non-Mandatory/Discretionaryrequirements as per Part E of Schedule II to the SEBIListing Regulations, the Company has complied withthe following:

1. The Board - The Chairman being a Non-Executive and Independent Director has his ownoffice. However, an office is made available forhis use, if required by him, during his visit to theCompany for attending meetings.

2. Shareholders Rights - Quarterly results aresubjected to limited review by Statutory Auditorsare generally published in the Free Press Journal,Navshakti and Financial Express (Gujaratiedition) Ahmedabad having wide circulation.The quarterly unaudited results along with thepress releases are made available on the websiteof the Company (www.mastek. com/financial-information). Other information relating toshareholding pattern, compliance with therequirements of corporate governance, etc. areuploaded on BSE/NSE website and on Mastek’swebsite in the investors section. Separate Halfyearly financial performance report, however,not been sent to each shareholder.

3. Modified opinion(s) in Audit Report - TheCompany’s financial statements for the financialyear 2017-18 does not contain any modifiedaudit opinion.

4. Separate posts of Chairman and ChiefExecutive Officer (CEO) - The position ofChairman and CEO is bifurcated in the Company.The Board is headed by an Independent Non-Executive Chairman. Managing Director isanother position.

5. Reporting of Internal Auditor -

The Internal Auditor reports directly to the AuditCommittee and attends the Audit Committeemeetings and interacts directly with the AuditCommittee members.

XII. VICE-CHAIRMAN & MANAGING DIRECTOR/GROUP CHIEF FINANCIAL OFFICER (CFO)CERTIFICATION

The Vice-Chairman & Managing Director and theGroup CFO have issued a certificate pursuantto the provisions of SEBI Listing Regulationscertifying that the financial statements donot contain any untrue statement and thesestatements represent a true and fair view of theCompany’s affairs as at March 31, 2018. Thesaid certificate is annexed and forms part of thisreport.

XIII. DISCLOSURES WITH RESPECT TO DEMATSUSPENSE ACCOUNT/ UNCLAIMEDSUSPENSE ACCOUNT.

As on March 31, 2018, there are no outstandingshares credited/lying in the demat suspenseaccount/unclaimed suspense account.

During the year under review, Company hastransferred 55,318 equity shares (48,285 sharesin November 2017 and 7,033 shares in January2018) to Investor Education and ProtectionFund Authority Demat Account in respect of thedividends which have remained unclaimed forlast seven consecutive years.

93Mastek Limited


DECLARATION REGARDING COMPLIANCE WITH THE CODE OF CONDUCT OF THE COMPANY BY THE BOARD MEMBERS AND SENIOR MANAGERIAL PERSONNEL

To the Members of Mastek Limited,

This is to confirm that the Company has adopted Code of Conduct for the Board of Directors and Senior Managerial Personnel of the Company, which is available at www.mastek.com.

I declare that the Board of Directors and Senior Managerial Personnel have affirmed compliance with the Code of Conduct of the Company for the financial year ended March 31, 2018.

Sudhakar RamVice Chairman & Managing Director

Place: MumbaiDate: April 18, 2018

VICE-CHAIRMAN & MANAGING DIRECTOR (VC & MD) AND GROUP CHIEF FINANCIAL OFFICER (GROUP CFO) CERTIFICATION

We the undersigned, in our respective capacities as Vice-Chairman & Managing Director and Group Chief Financial Officer of Mastek Limited (“the Company”) to the best of our knowledge and belief, certify that:

1) We have reviewed financial statements and the cash flow statement for the financial year ended March 31, 2018 and that to thebest of our knowledge and belief, we state that:

a) these statements do not contain any materially untrue statement or omit any material fact or contain statements that mightbe misleading;

b) these statements together present, a true and fair view of the Company’s affairs and are in compliance with existingaccounting standards, laws and regulations.

2) We further state that to the best of our knowledge and belief, there are no transactions entered into by the Company during theyear which are fraudulent, illegal or which violate the Company’s code of conduct.

3) We hereby declare that, all Board Members and Senior Managerial Personnel have confirmed compliance with the Code ofConduct as adopted by the Company.

4) We are responsible for establishing and maintaining internal controls for financial reporting and that we have evaluated theeffectiveness of internal control systems of the Company pertaining to financial reporting of the Company and have disclosed tothe Auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are awareand the steps we have taken or propose to take to rectify these deficiencies.

5) We have indicated, based on our most recent evaluation, wherever applicable, to the Auditors and the Audit Committee:

(a) significant changes, if any, in internal controls over financial reporting during the year;

(b) significant changes, if any, in the accounting policies during the year and that the same has been disclosed in the notes tothe financial statements; and

(c) instances of significant fraud of which we have become aware and the involvement therein, if any, of the management oran employee having a significant role in the Company’s internal control system over financial reporting.

Yours faithfully,

Place : Mumbai Sudhakar Ram Abhishek SinghDate : April 18, 2018 Vice Chairman & Managing Director Group Chief Financial Officer


INDEPENDENT COMPANY SECRETARY CERTIFICATE ON CORPORATE GOVERNANCE

To,The MembersMastek Limited (the “Company”)804/805 President House, Opp. C. N. Vidyalaya, Nr. Ambawadi Circle, Ahmedabad-380 006

I have examined the compliance of conditions of Corporate Governance by the Company, for the financial year ended March 31, 2018 as stipulated under the relevant provisions of Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 (the “Listing Regulation”) as referred to in Regulation 15(2) of the Listing Regulations.

The compliance of the conditions of Corporate Governance is the responsibility of the Management. My examination was limited to the procedure and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of the opinion on the financial statements of the Company.

In my opinion, and to the best of my information and according to the explanations given to me, I certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Regulations, as applicable.

I further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

Prashant S. Mehta Practising Company Secretary

Place: Mumbai Membership No.: 5814Date: April 18, 2018 CP. No.: 17341

95Mastek Limited


Beyond Business: Corporate Social Responsibility Mastek Foundation is the CSR wing of the parent Company, Mastek Limited. Founded in 2002, the mission of Mastek Foundation evolves as Informed Giving. Responsible Receiving. The institution seeks to inspire company employees by creating awareness among them to give back to the community in ways which would meet the needs and challenges faced by community members. One such medium could be through volunteering and giving opportunities. The Foundation also supports NGOs to scale and build their capabilities through our core skill of IT. Hence, the Foundation has three clearly defined pillars: ENGAGE, GIVE AND BUILD.

ENGAGE:

Mastek engages employees actively with community development and also encourages them to contribute wholeheartedly to society. A number of community development activities have made remarkable pogress.

Inspired 2017 (Lata 75)

Mastek Foundation organized Inspired 2017, an annual fundraising event in support of Snehalaya, Ahmednagar, an NGO that works for the welfare of the less fortunate trafficked children. This event was organized for the fourth consecutive year. Singer Sanjeevani Bhelande paid rich tributes to the renowned music queen, Lata Mangeshkar who completed 75 glorious years in Indian cinema. The evening brought together music lovers of Mumbai in aid of a common humanitarian cause. Snehalaya raised a tidy sum of Rs. 38.5 lakh within three hours. The proceeds went towards a noble cause of constructing an adoption center, named Snehankur for abandoned children. Sudhakar Ram, (Vice Chairman & Managing Director) inaugurated the center in October 2O17.

“Since the beginning of setting up Snehankur adoption center in the 600sqft space in Ahmednagar in 2003, we dreamt of having an ideal place for the complete well-being of abandoned infants. However, it took us 12 years to realize this dream. Mastek

foundation has made this possible. The new Snehankur adoption center at Kedgaon, a suburb in Ahmednagar is now a state-of-the-art facility for fulfilling the complete emotional, health and hygienic needs of abandoned, relinquished and special needs children. It is 16000 square feet building on a 20000 sq ft plot of land with all the necessary amenities. Mastek foundation, staff & founders of Mastek have played a huge role in realizing this dream of an ideal adoption center. Snehalaya & Snehankur team express their heartfelt gratitude to Mastek foundation for supporting us to complete this herculean task and helping us save so many precious lives of these infants. A big Thank you to all!”- Dr. Girish Kulkarni, Founder, Snehalaya & Snehankur

1. Environment Day:

On Environment Day, Mastek Foundation, joined handswith Srujna Charitable Trust to set up stalls of eco-friendlyproducts like jute bags, cloth bags and paper bagsspecially handcrafted by women self-help groups. SrujnaCharitable Trust especially empowers underprivilegedwomen by providing them with the required skills training to become budding entrepreneurs. The NGO sold goodsworth Rs. 5000.

2. Tree plantation drive:

A tree plantation drive was organized in collaboration withHARIYALI, an organization that works for environmentalsustainability. Thirty-six saplings of neem, mango, peepaland other indigenous plant varieties were planted inTetavali village in Rabalein, in an attempt to increase themuch-needed green cover, improve the quality of air andreduce carbon dioxide.

3. Blood donation camps:

Two blood donation camps were conducted in partnershipwith Think Foundation – a non-profit organizationworking for the welfare for children with Thalassemia. 397


employees from Mahape, SEEPZ and Pune offices this year donated blood touching the valuable lives of 1191 children fighting Thalassemia.

4. Providing marketplace for NGOs:

To empower and encourage the communities we workwith, Mastek Foundation provided opportunities for NGOsto set up stalls at Mastek premises. These stalls help tocreate awareness among employees on pressing socialinitiatives, and at the same time aid in capacity building.Eight organizations set up stalls on festive occasions likeDiwali, Raksha Bandhan, Christmas and InternationalWomens’ Day. These institutions collected over Rs 28,000/-in support of children with special needs, as also toempower and encourage trafficked women and ambitiouswomen entrepreneurs from underprivileged backgrounds.

Srujna has been doing exhibitions in the Mastek office for 3 years. More than the opportunity to earn, the lesser privileged women have always cherished the positive response and respect from the organizers and employees. Employees are also very eager and supportive towards such causes. Women always have a great sale day. – Jyotika Founder, Srujna Charitable Trust

5. Unique giving - Attitude is Gratitude

A notable initiative of the Mastek Foundation was a veryexclusive way of engaging employees with the community

around the theme, “Attitude is Grattitude” where employees expressed gratitude for support from one another. NGO partners of Mastek Foundation visited each office bay to share the social impact created with the support from employees who are part of the monthly payroll giving program. Eight NGOs interacted with employees about their work and tried to mobilize funds. The special event culminated with an extraordinary performance by children from Aarambh Trust, Sangopita and Precious Beacon. Senior management at Mastek encouraged employees to continue to support these social causes.

6. Running for a cause:

For the fifth year the Mastek Foundation Run hadover 1000 participants in support of NGO Snehalayaof Ahmednagar, working for the cause of women andchildren. Our dynamic employees also took part inthe Tata Mumbai Marathon 2018 in support of ThinkFoundation, Kherwadi Social Welfare Association andSamaritan Help Mission. Over 100 participants took partto support the cause of social development.

BUILD:

SNEHA (Society for Nutrition, Education, Health and Action) is a secular; Mumbai based non-profit organization that supports the cause of women’s health in disadvantaged urban communities. SNEHA targets 4 leading public health areas namely, Maternal and New Born Health, Child Health and Nutrition, Sexual and Reproductive Health and Prevention of Violence against Woman and Children.

97Mastek Limited


SNEHA uses technology to get relevant and timely data to improve its decision-making and efficiency. This institution collects and tracks data for pregnant women including tracking relevant referrals and outcomes through its Maternal Health and Tracking Program.

Over the years, Mastek has helped SNEHA in successfully implementing BI software for 4 of its programs. This year, the SNEHA team independently took up automation of referral tracking with support from Mastek Foundation. Major cost saving in project implementation was achieved. The new system has helped SNEHA to reduce over 50% costs, locate records of 12% data which were earlier unmatched, but were now

retrieved through the system in the first 3 runs itself. In addition, Mastek Foundation provides consultancy to SNEHA on several technology initiatives and projects.

WonderWork is a leading organization which provides free surgeries for poor children in developing countries who are deprived of treatment and care. We developed an EMR (Electronic Medical Records) system to help them maintain the patient demographic information along with eye surgery related medical history. It also has a feature of detecting fraud by performing face recognition /verification for duplicates. The reports are generated under different categories like, Fraud, Geographic (using Google map API), Management, Quality and Outcome.

Women in labor/complication are referred from lower health facility to higher health facility

M&E investigators collect referred women data from referred slips in CommCare

Women referred to higher health facility - deliver here or referred again

M&E investigators collect received referred data from Hospitals registers in CommCare

Records are matched to track referred women who reached the higher health facility

Data Entry Operators match record to record in MS Excel

Tracked records serve as an indicator of the program

M&E coordinators and M&E officers carry out analysis based on these tracked records

Referral data collection process in MNH program:

The Tracking Application: Output Tables


Project Deep Blue:

In 2015, the dynamic top management of Mastek’s leadership team, Sudhakar Ram (Vice Chairman & Managing Director), Radhakrishnan Sundar (Executive Director) & Sanjay Mudnaney (Co-Founder and Trustee, Mastek Foundation), discussed the possibilities of how they could make young students, the future leaders of tomorrow, involve their participation in current innovations and instill in them leadership qualities.

Keeping this in mind, Project Deep Blue was set up as a unique platform for young technology students to solve real-life problems, inspire others around them, and bring about positive changes in society. Now in its 3rd Season, Project Deep Blue saw a 110% growth in participation. Sixty-five teams across 13 different colleges in Mumbai and Navi Mumbai competed in 2017-2018. Various workshops like Design Thinking conducted by Ravindra Kadam (CTO Benow), webinars on latest technologies like Image Processing, Social Data Analytics and a session on Demonstration and presentation skills by Sri Ram Kumar were conducted to support their learnings. The semi-finals and finals were held on 17th Feb 2018 at K.J Somaiya Institute of Information Technology, Sion. 57 to 65 teams proudly presented working solutions on interesting subjects in the semi-finals. The team from Mukhesh Patel Institute of technology bagged the first winning position.

GIVE:

Partnering with Non-profit organizations.

During the year, a number of NGO partners participated in CSR initiatives at Mastek to support useful causes:

1. Animal Welfare:

NGOs:

• ThaneSPCA

• PAWS

Project: supporting surgeries and care of stray animals in the urban areas of Thane and Dombivali.

2. Promoting Education:

NGOs:

• TagoreFoundation

• Sangopita

• AarambhTrust

• SunbirdTrust

• MumbaiFirst

• KherwadiSocialWelfareAssociation(KSWA)

• BorderlessWorldFoundation

Project: Supporting pre-school and learning centres for migrant children. Arranging mid-day meals to children. Providing vocational training programmes for youth in Mumbai. Arranging educational and recreational facilities for homeless, conflict hit migrant orphan female children from poor and deprived sections of the strife-torn valley of Kashmir.

3. Promoting Healthcare

NGOs:

• MahanTrust

• SEARCH

• PrasadChikitsa

• ThinkFoundation

Project: Supporting tribal hospitals in reaching out to 5000 patients, awareness camps for health workers, farmers and villagers on health and sanitation, supporting Thalassemia Prevention programme and mortality control program for tribal people in backward regions of the country with little access to adequate healthcare and nutrition.

4. Women employment

NGO: Snehalaya

Project: Building an adoption centre for 345 women (unwed mothers and rape victims)

****

FinancialStatements

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financialstatements of Mastek Limited (‘the Company’), whichcomprise the Balance Sheet as at 31 March 2018,the Statement of Profit and Loss (including OtherComprehensive loss), the Cash Flow Statement and theStatement of Changes in Equity for the year then ended,and a summary of the significant accounting policies andother explanatory information.

Management’s Responsibility for the Standalone Financial Statements

2. The Company’s Board of Directors is responsible for thematters stated in Section 134(5) of the Companies Act,2013 (‘the Act’) with respect to the preparation of thesestandalone financial statements that give a true and fairview of the state of affairs (financial position), profit orloss (financial performance including other comprehensiveloss), cash flows and changes in equity of the Companyin accordance with the accounting principles generallyaccepted in India, including the Indian AccountingStandards (‘Ind AS’) specified under Section 133 of the Act.This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of theAct for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design, implementation and maintenance ofadequate internal financial controls, that were operatingeffectively for ensuring the accuracy and completenessof the accounting records, relevant to the preparationand presentation of the standalone financial statementsthat give a true and fair view and are free from materialmisstatement, whether due to fraud or error.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on thesestandalone financial statements based on our audit.

4. We have taken into account the provisions of the Act, theaccounting and auditing standards and matters whichare required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

5. We conducted our audit in accordance with the Standardson Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain

reasonable assurance about whether these standalone financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain auditevidence about the amounts and the disclosures in thefinancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks ofmaterial misstatement of the financial statements, whetherdue to fraud or error. In making those risk assessments, theauditor considers internal financial controls relevant to theCompany’s preparation of the financial statements that givea true and fair view in order to design audit procedures thatare appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policiesused and the reasonableness of the accounting estimatesmade by the Company’s Directors, as well as evaluating theoverall presentation of the financial statements.

7. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our auditopinion on these standalone financial statements.

Opinion

8. In our opinion and to the best of our information andaccording to the explanations given to us, the aforesaidstandalone financial statements give the informationrequired by the Act in the manner so required and givea true and fair view in conformity with the accountingprinciples generally accepted in India, including Ind ASspecified under Section 133 of the Act, of the state ofaffairs (financial position) of the Company as at 31 March2018, and its profit (financial performance including othercomprehensive loss), its cash flows and the changes inequity for the year ended on that date.

Other Matter

9. The comparative financial information for the year ended31 March 2017 and the transition date opening balancesheet as at 1 April 2016, prepared in accordance withInd AS included in these standalone financial statements,are based on the previously issued statutory financialstatements for the year ended 31 March 2017 and 31March 2016, respectively prepared in accordance withAccounting Standards prescribed under Section 133 ofthe Act, read with Rule 7 of the Companies (Accounts)Rules, 2014 (as amended) which were audited by thepredecessor auditor, whose reports dated 20 April 2017and 19 April 2016, respectively, expressed unmodifiedopinion on those standalone financial statements, and

Independent Auditor’s ReportTo the Members of Mastek Limited


have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS, which have been audited by us. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor’s Report) Order,2016 (‘the Order’) issued by the Central Government ofIndia in terms of Section 143(11) of the Act, we give inthe Annexure A, a statement on the matters specified inparagraphs 3 and 4 of the Order.

11. Further to our comments in Annexure A, as required bySection 143(3) of the Act, we report that:

a) we have sought and obtained all the information andexplanations which to the best of our knowledge andbelief were necessary for the purpose of our audit;

b) in our opinion, proper books of account as requiredby law have been kept by the Company so far as itappears from our examination of those books;

c) the standalone financial statements dealt with by thisreport are in agreement with the books of account;

d) in our opinion, the aforesaid standalone financialstatements comply with Ind AS specified under Section 133 of the Act;

e) on the basis of the written representations receivedfrom the directors and taken on record by the Boardof Directors, none of the directors is disqualified as on31 March 2018 from being appointed as a director interms of Section 164(2) of the Act;

f) we have also audited the internal financial controlsover financial reporting (IFCoFR) of the Company ason 31 March 2018, in conjunction with our audit ofthe standalone financial statements of the Companyfor the year ended on that date and our report dated31 March 2018 as per Annexure B, expressed anunmodified opinion.;

g) with respect to the other matters to be included inthe Auditor’s Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules, 2014(as amended), in our opinion and to the best ofour information and according to the explanationsgiven to us:

(i) the Company, as detailed in Note 37 to thestandalone financial statements, has disclosedthe impact of pending litigations on itsfinancial position;

(ii) the Company, as detailed in Note 29 to thestandalone financial statements, has madeprovision, as required under the applicablelaw or Ind AS, for material foreseeable losses,if any, on long-term contracts, includingderivative contracts;

(iii) there has been no delay in transferring amounts,required to be transferred, to the InvestorEducation and Protection Fund by the Company;

(iv) the disclosure requirements relating to holdingsas well as dealings in specified bank notes wereapplicable for the period from 8 November 2016to 30 December 2016 which are not relevant tothese standalone financial statements. Hence,reporting under this clause is not applicable.

For Walker Chandiok & Co LLP Chartered Accountants

Firm’s Registration No.: 001076N/N500013

per Khushroo B. PanthakyPlace: Mumbai Partner Date: 18 April 2018 Membership No.: 42423


101Mastek Limited


Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

(i) (a) The Company has maintained proper records showingfull particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified bythe management during the year and no materialdiscrepancies were noticed on such verification. Inour opinion, the frequency of verification of the fixedassets is reasonable having regard to the size of theCompany and the nature of its assets.

(c) The title deeds of all the immovable properties areheld in the name of the Company.

(ii) The Company does not have any inventory. Accordingly, theprovisions of clause 3(ii) of the Order are not applicable.

(iii) The Company has not granted any loan, securedor unsecured to companies, firms, Limited LiabilityPartnerships (LLPs) or other parties covered in the registermaintained under Section 189 of the Act. Accordingly,the provisions of clauses 3(iii)(a), 3(iii)(b) and 3(iii)(c) ofthe Order are not applicable.

(iv) In our opinion, the Company has complied with theprovisions of Sections 185 and 186 of the Act in respect ofloans, investments, guarantees and security.

(v) In our opinion, the Company has not accepted any depositswithin the meaning of Sections 73 to 76 of the Act andthe Companies (Acceptance of Deposits) Rules, 2014 (asamended). Accordingly, the provisions of clause 3(v) of theOrder are not applicable.

(vi) The Central Government has not specified maintenanceof cost records under sub-section (1) of Section 148 ofthe Act, in respect of Company’s services. Accordingly,the provisions of clause 3(vi) of the Order arenot applicable.

(vii) (a) The Company is regular in depositing undisputedstatutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, goods and service tax, value added tax, cess and other material statutory dues, as applicable, to the appropriate authorities. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they become payable.

(b) The dues outstanding in respect of income-tax, sales-tax, service-tax, goods and service tax and value addedtax on account of any dispute, are as follows:

Statement of Disputed Dues

Name of the statute

Nature of dues Amount (`) Lakhs

Amount paid under Protest

(`) Lakhs

Period to which the amount relates

Forum where dispute is pending

Remarks, if any

The Gujrat Stamp Act 1958

Demand of Stamp Duty on Demerger

350 350 FY 2014-2015 Chief Controlling Revenue Authority Gujrat

The Maharashtra Value Added Tax Act, 2002

VAT liability including Interest

840 28 FY 2006-07, FY 2009-10, FY 2012-13, FY 2013-14

Joint Commissioner of Sales Tax (Appeals), Mumbai

The Central Sales Tax Act, 1956

CST liability including interest

77 11 FY 2006-07, FY 2009-10, FY 2012-13

& FY 2013-14

Joint Commissioner of Sales Tax (Appeals), Mumbai

The Bombay Sales Tax Act, 1959

BST liability including interest

66 5 FY 2001-02 Joint Commissioner of Sales Tax (Appeals), Mumbai

The Income Tax Act, 1961

Income tax and interest demanded

651 - AY 2011 - 12, AY 2013 - 14

ITAT



282 - AY 2014 – 15 CIT (Appeals)



854 - AY 2015 - 16 Assessing officer

Annexure A to the Independent Auditor’s Report of even date to the members of Mastek Limited, on the standalone financial statements for the year ended 31 March 2018


(viii) The Company has not defaulted in repayment of loansor borrowings to any bank or financial institution orgovernment during the year. The Company did not haveany outstanding debentures during the year.

(ix) The Company did not raise moneys by way of initial publicoffer or further public offer (including debt instruments)and did not have any term loans outstanding during theyear. Accordingly, the provisions of clause 3(ix) of the Orderare not applicable.

(x) In our opinion, no fraud by the Company or on theCompany by its officers or employees has been noticed orreported during the period covered by our audit.

(xi) Managerial remuneration has been paid (and)/ provided bythe company in accordance with the requisite approvalsmandated by the provisions of Section 197 of the Act, read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company. Accordingly,provisions of clause 3(xii) of the Order are not applicable.

(xiii) In our opinion, all transactions with the related partiesare in compliance with Sections 177 and 188 of Act,where applicable, and the requisite details have beendisclosed in the financial statements etc, as required by theapplicable Ind AS.

(xiv) During the year, the company has not made any preferential allotment or private placement of shares or fully or partlyconvertible debentures.

(xv) In our opinion, the company has not entered into any non-cash transactions with the directors or persons connectedwith them covered under Section 192 of the Act.

(xvi) The company is not required to be registered under Section45-IA of the Reserve Bank of India Act, 1934.




Annexure Ato the Independent Auditor’s Report of even date to the members of Mastek Limited, on the standalone financial statements for the year ended 31 March 2018

103Mastek Limited


Annexure Bto the Independent Auditor’s Report of even date to the members of Mastek Limited on the standalone financial statements for the year ended 31 March 2018

Independent Auditor’s Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)

1. In conjunction with our audit of the standalone financialstatements of Mastek Limited (‘the Company’) as at andfor the year ended 31 March 2018, we have audited theinternal financial controls over financial reporting (‘IFCoFR’)of the Company as at that date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s Board of Directors is responsible forestablishing and maintaining internal financial controlsbased on criteria established by the Company consideringthe essential components of internal control stated inthe Guidance Note on Audit of Internal Financial Controlover Financial Reporting (“Guidance Note”) issued by theInstitute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design, implementation andmaintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly andefficient conduct of the Company’s business, includingadherence to the Company’s policies, the safeguarding ofits assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records,and the timely preparation of reliable financial information,as required under the Act.


3. Our responsibility is to express an opinion on the Company’s IFCoFR based on our audit. We conducted our audit inaccordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India (‘ICAI’) anddeemed to be prescribed under Section 143(10) of theAct, to the extent applicable to an audit of IFCoFR, andthe Guidance Note issued by the ICAI. Those Standardsand the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtainreasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain auditevidence about the adequacy of the IFCoFR and theiroperating effectiveness. Our audit of IFCoFR includesobtaining an understanding of IFCoFR, assessing the riskthat a material weakness exists, and testing and evaluatingthe design and operating effectiveness of internal control,based on the assessed risk. The procedures selected dependon the auditor’s judgement, including the assessment of therisks of material misstatement of the financial statements,whether due to fraud or error.

5. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our auditopinion on the Company’s IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A company’s IFCoFR is a process designed to providereasonable assurance regarding the reliability of financialreporting and the preparation of financial statements forexternal purposes in accordance with generally acceptedaccounting principles. A company’s IFCoFR include thosepolicies and procedures that (1) pertain to the maintenanceof records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally acceptedaccounting principles, and that receipts and expendituresof the company are being made only in accordance withauthorisations of management and directors of thecompany; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition,use, or disposition of the company’s assets that could havea material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of IFCoFR, includingthe possibility of collusion or improper managementoverride of controls, material misstatements due to


Annexure Bto the Independent Auditor’s Report of even date to the members of Mastek Limited on the standalone financial statements for the year ended 31 March 2018

error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects,adequate internal financial controls over financial reportingand such internal financial controls over financial reportingwere operating effectively as at 31 March 2018, basedon the internal control over financial reporting criteria

established by the Company, considering the essential components of internal control stated in the Guidance Notes issued by the ICAI.

For Walker Chandiok & Co LLP

Chartered AccountantsFirm’s Registration No.: 001076N/N500013


105Mastek Limited


(` in lakhs)

Note As at

March 31, 2018 March 31, 2017 April 1, 2016ASSETSNon-current assetsProperty plant & equipment, net 3(a) 4,269 4,150 4,252 Capital work-in-progress 208 1 14 Other Intangible assets, net 3(b) 279 328 344 Financial assets Investments 4(a) 1,403 1,405 216 Loans 4(b) 89 113 109

Other non-current financial assets 4(c) 202 600 258 Non-current tax assets 871 2,081 1,730 Deferred tax assets 24 3,424 3,550 3,894 Other non-current assets 5 86 71 132 Total non-current assets 10,831 12,299 10,949 Current assetsFinancial Assets Investments 6(a) 11,770 10,502 3,138

Trade receivables 6(b) 2,602 1,435 5,405 Cash and Cash equivalents 6(c) 1,199 372 1,410 Bank balances other than cash & cash equivalent 6(c) 29 25 2,134

Loans 6(d) 5 4 14 Other current financial assets 6(e) 792 3,037 1,425

Other current assets 7 762 304 375 Total current assets 17,159 15,679 13,901 Total assets 27,990 27,978 24,850 EQUITY AND LIABILITIESEquityEquity Share capital 8 1,185 1,169 1,150 Other Equity 9 21,645 21,831 18,546 Total Equity 22,830 23,000 19,696 Non-current liabilitiesFinancial liabilities Borrowings 10(a) 73 38 18 Other non-current financial liabilities 10(b) 760 433 72 Deferred tax liabilities 24 180 803 388 Provisions 11 347 606 494 Total non-current liabilities 1,360 1,880 972 Current liabilitiesFinancial liabilities

Trade payables 12(a) 299 175 382 Other current financial liabilities 12(b) 2,606 1,975 2,520

Other current liabilities 13 771 822 729 Provisions 14 124 126 551 Total current liabilities 3,800 3,098 4,182 Total Equity & liabilities 27,990 27,978 24,850

Balance SheetAs at March 31, 2018

See accompanying notes to the financial statements

As per our report of even date attached For and on behalf of the Board of Directors of Mastek Limited

For Walker Chandiok & Co LLP Chartered Accountants Firm Registration No: 001076N/N500013

Khushroo B. Panthaky Sudhakar Ram S. SandilyaPartner Membership No.: 42423

Vice Chairman and Managing Director Non-Executive Chairman and Independent Director

Abhishek Singh Dinesh KalaniChief Financial Officer Company Secretary

Place : Mumbai Place : MumbaiDate : April 18, 2018 Date : April 18, 2018


(` in lakhs, except per share data)

NoteYear ended

March 31, 2018 March 31, 2017INCOME

Revenue from operations 15 16,232 16,948

Other income 16 2,323 1,282

Total Income 18,555 18,230

EXPENSES

Employee benefits expenses 17 11,367 9,878

Finance costs 18 19 24

Depreciation and amortization expenses 19 1,119 1,204

Other expenses 20 3,316 4,381

Total Expenses 15,821 15,487

Profit before exceptional item and tax 2,734 2,743

Exceptional items - loss 21 - (340)

Profit before tax 2,734 2,403

Tax expense :

Current tax 24 742 695

Deferred tax charge 119 299

Income tax charge / (write back) for earlier years 299 (903)

Total tax expense 1,160 91

Profit after tax for the year 1,574 2,312

Other comprehensive income (OCI), net of taxes

Items that will not be reclassified subsequently to the statement of profit or loss:

Defined benefit plan actuarial gains/ (losses) 390 1

Income tax relating to items that will not be reclassified to profit and loss 113 0

Items that will be reclassified subsequently to the statement of profit or loss:

Net change in fair value of forward contracts designated as cash flow hedges (2,696) 852

Net change in fair value of financial instruments 292 334

Income tax relating to items that will be reclassified to profit and loss (812) 397

Total other comprehensive income/(loss) for the year, net of taxes (1,315) 790

Total comprehensive income/(loss) for the year 259 3,102

Earnings per equity share 22

(Equity shares of par value ` 5/- each)

Basic 6.69 9.96

Diluted 6.33 9.55

Statement of Profit and LossFor the year ended March 31, 2018








107Mastek Limited


(` in lakhs)Year ended

March 31, 2018 March 31, 2017Cash flows from operating activitiesProfit for the year 1,574 2,312 Adjustments for :

Interest income (133) (220)Guarantee Commission (40) (12)Employee stock compensation expenses 174 83 Interest on finance lease and others 19 24 Depreciation and amortisation 1,119 1,253 Provision / (Reversal) for doubtful debts and loans and advances, net 88 136 Bad debts written off 16 10 Tax Expense 1,160 91 Dividend income from current investments (6) - Dividend from subsidiary (997) (237)Loss/(Profit) on sale of fixed assets net 1 (4)Profit on sale of current investments (340) (305)Rental income (249) (256)

Operating profit before working capital changes 2,386 2,875 Decrease / (Increase) in trade receivables (1,271) 3,644 (Increase) / Decrease in loans and advances and other current and non current assets 478 (563)(Decrease) in trade payables, other liabilities and provisions 362 (228)

Cash generated from operations 1,955 5,728 Income taxes (paid)/refund, net 253 (702)

Net cash generated from operating activities 2,208 5,026 Cash flows from investing activities

Proceeds from sale of property, plant & equipment 6 29 Purchase of property, plant & equipment and software (1,272) (1,106)Interest received 89 359 Dividend from subsidiary 997 237 Investment in subsidiary - (1,187)Purchase of other investment - equity share warrants - (1)Rental income 239 248 Dividend income from current investments 6 - Realisation of bank deposits having original maturity over three months - 2,095 Guarantee Commission received 11 - Purchase of current investments (11,305) (25,825)Proceeds from current investments 10,668 19,100

Net cash (used in) / generated from investing activities (561) (6,051)Cash flows from financing activities

Proceeds from issue of shares under the employee stock option schemes 243 213 Proceeds from / (Repayment of) borrowings, net 25 18 Dividends paid including dividend distribution tax (1,069) (233)Interest paid on finance lease and others (19) (11)

Net cash (used in) financing activities (820) (13)Net (decrease) / increase in cash and cash equivalents during the year 827 (1,038)Cash and cash equivalents at the beginning of the year 372 1,410 Cash and cash equivalents at the end of the year 1,199 372

The above Cash Flow Statement has been prepared under the 'Indirect Method' as set out in the Ind AS - 7 on Statement of Cash Flow issued by the Institute of Chartered Accountants of India.

Cash Flow StatementFor the year ended March 31, 2018








(a) Equity share capital

(` in lakhs)

Balance as at 1st April, 2016 1,150 Add: Shares issued on exercise of stock options and restricted shares 19 Balance as at 31st March, 2017 1,169 Balance as at 1st April, 2017 1,169 Add: Shares issued on exercise of stock options and restricted shares 16 Balance as at 31st March, 2018 1,185

(b) Other Equity(` in lakhs)

Particulars

Reserve & Surplus Other Comprehensive Income

Total other

equity

Capital Redemption

Reserve

Securities premium

reserve

Share options

outstanding account

Retained Earnings

Employee Benefit

Expenses

Fair value of Cash Flow

Hedge

Fair value of Non Current Investment

in Debt Funds

Balance as at 1st April 2016 1,539 1,081 707 14,494 - 717 8 18,546

Issue of share capital on exercise of employee share option

- 194 - - - - - 194

Employee share-based compensation - - 229 - - - - 229

Transferred to securities premium reserve - 106 (106) - - - - -

Profit for the year - - - 2,312 - - - 2,312

Cash dividends - - - (233) - - - (233)

ESOP Adjustments * - - (28) 21 - - - (7)

Other comprehensive income (net of taxes) - - - - 1 571 218 790

Balance as at 31st March 2017 1,539 1,381 802 16,594 1 1,288 226 21,831Balance as at 1st April 2017 1,539 1,381 802 16,594 1 1,288 226 21,831Issue of share capital on exercise of employee share option

- 227 - - - - - 227

Employee share-based compensation - - 395 - - - - 395

Transferred to securities premium reserve - 164 (164) - - - - -

Profit for the year - - - 1,574 - - - 1,574

Cash dividends - - - (1,067) - - - (1,067)

ESOP Adjustments * - - (4) 4 - - - -

Other comprehensive income (net of taxes) - - - - 264 (1,805) 226 (1,315)

Balance as at 31st March 2018 1,539 1,772 1,029 17,105 265 (517) 452 21,645

*ESOP adjustment reflects lapse of vested stock options during the year.

Statement of Changes in EquityFor the year ended March 31, 2018








109Mastek Limited


Significant accounting policies and Notes to accountsFor the year ended March 31, 2018(` in lakhs, except share and per share data, unless otherwise stated)

1 COMPANY OVERVIEW

Mastek Limited (the ‘Company’) is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The Company is a provider of vertically-focused enterprise technology solutions.

The Company’s offering portfolio includes business and technology services comprising of Application Development, Application Maintenance, Business Intelligence and Data Warehousing, Testing & Assurance, Digital Commerce, Agile Consulting and Legacy Modernisation. The Company carries out its operations in India and has its software development centres in India at Mumbai, Pune, Chennai and Mahape.

2 BASIS OF PREPARATION AND PRESENTATION

(a) Statement of Compliance

These financial statements have been preparedin accordance with Indian Accounting Standards(“Ind AS”) notified under the Companies (IndianAccounting Standards) Rules, 2015 and Companies(Indian Accounting Standards) Amendment Rules,2016, as applicable. For all the periods upto the yearended March 31, 2017, the Company had earlierprepared and presented its financial statementsin accordance with accounting standards notifiedunder section 133 of the Companies Act 2013(Indian GAAP). These standalone financialstatements for the year ended 31st March, 2018 arethe first financial with comparatives, prepared underInd AS. The adoption was carried out in accordancewith Ind AS 101, First Time adoption of IndianAccounting Standards. The transition was carriedout from Indian Accounting Principle generallyaccepted in India as prescribed under Section 133of the Act read with the Rule 7 of the Companies(Accounts) Rules, 2014 (Indian GAAP), which wasthe previous GAAP. Reconciliations and descriptionof the effect of the transition to Ind AS from IndianGAAP is given in Note 32.

These standalone financial statement of the Companyas at and for the year ended 31st March 2018 (including Comparatives) were approved and authorized by theCompany’s board of directors as on 18th April 2018.

All amounts included in the financial statementsare reported in Indian rupees (in lakhs) except share

and per share data unless otherwise stated and “0” denotes amounts less than one lakh rupees.

(b) Basis of Preparation

The financial statements have been prepared on ahistorical cost convention and on an accrual basis,except for the following material items that have beenmeasured at fair value as required by relevant Ind AS:

i) Derivative financial instruments;

ii) Certain financial assets and liabilities measuredat fair value (refer accounting policy on financialinstruments);

iii) Share based payment transactions and

iv) Defined benefit and other long-term employeebenefits

(c) Use of estimate and judgement

The preparation of standalone financial statementsin conformity with Ind AS requires management tomake judgments, estimates and assumptions thataffect the application of accounting policies andthe reported amounts of assets, liabilities, incomeand expenses. Actual results may differ from theseestimates. Estimates and underlying assumptions arereviewed on a periodic basis. Revisions to accountingestimates are recognized in the period in whichthe estimates are revised and in any future periodsaffected. In particular, information about significantareas of estimation, uncertainty and critical judgmentsin applying accounting policies that have the mostsignificant effect on the amounts recognized in thestandalone financial statements is included in thefollowing notes:

i) Revenue recognition: The Company applies the percentage of completion method in accountingfor its fixed price contracts. Use of the percentage of completion method requires the Company toestimate the efforts or costs expended to dateas a proportion of the total efforts or costs to beexpended. Efforts or costs expended have beenused to measure progress towards completion asthere is a direct relationship between input andproductivity. Provisions for estimated losses, ifany, on uncompleted contracts are recorded inthe period in which such losses become probablebased on the expected contract estimates at thereporting date.


ii) Income taxes: Significant judgments areinvolved in determining the provision for incometaxes, including the amount expected to be paidor recovered in connection with uncertain taxpositions.

iii) Defined benefit plans and compensatedabsences: The cost of the defined benefit plans,compensated absences and the present valueof the defined benefit obligations are basedon actuarial valuation using the projected unitcredit method. An actuarial valuation involvesmaking various assumptions that may differ fromactual developments in the future. These includethe determination of the discount rate, futuresalary increases and mortality rates. Due to thecomplexities involved in the valuation and its long-term nature, a defined benefit obligation is highlysensitive to changes in these assumptions. Allassumptions are reviewed at each reporting date.

iv) Property, plant & equipment: Property, plantand equipment represent a significant proportionof the asset base of the Company. The change inrespect of periodic depreciation is derived afterdetermining an estimate of an assets expecteduseful life and the expected residual at the end ofits life. The useful lives and residual values of theCompany’s are determined by the managementat the time the asset is acquired and reviewedperiodically, including at each financial year end.The lives are based on historical experience withsimilar assets as well as anticipation of futureevents, which may impact their life, such aschanges in technology.

v) Expected credit losses on financial assets:On application of Ind AS 109, the impairmentprovisions of financial assets are based onassumptions about risk of default and expectedtiming of collection. The Company uses judgments in making these assumptions and selecting theinputs to the impairment calculation, basedon the Company’s past history of collections,customer’s credit-worthiness, existing marketconditions as well as forward looking estimatesat the end of each reporting period.

vi) Deferred taxes: Deferred tax is recorded ontemporary differences between the tax bases ofassets and liabilities and their carrying amounts, at the rates that have been enacted or substantively

enacted at the reporting date. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable profits during the periods in which those temporary differences and tax loss carry forwards become deductible. The Company considers the expected reversal of deferred tax liabilities and projected future taxable income in making this assessment. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

vii) Provisions: Provision is recognised whenthe Company has a present obligation as aresult of past event and it is probable that anoutflow of resources will be required to settlethe obligation, in respect of which a reliableestimate can be made. Provisions (excludingretirement obligation and compensatedexpenses) are not discounted to its presentvalue and are determined based on bestestimate required to settle obligation at thebalance sheet date. These are reviewed ateach balance sheet date adjusted to reflectthe current best estimates.

viii) Share-based payments: The Grant date fair valueof options granted to employees is recognized asemployee expense, with corresponding increasein equity, over the period that the employeebecome unconditionally entitled to the option. Theincrease in equity recognized in connection withshare based payment transaction is presented as aseparate component in equity under “share optionoutstanding account”. The amount recognizedas expense is adjusted to reflect the impact of therevision estimates based on number of options thatare expected to vests, in the statement of profit andloss with a corresponding adjustment to equity.

(d) Summary of Significant accounting policies

i) Functional and Presentation Currency

Items included in the financial statements ofthe Company are measured using the currencyof the primary economic environment inwhich the entity operates (i.e. the “functionalcurrency”). The financial statements arepresented in Indian Rupee, the nationalcurrency of India, which is the functionalcurrency of the Company.


111Mastek Limited


ii) Foreign currency transactions and balances

Foreign currency transactions of the Companyand of its integral foreign branch are accountedat the exchange rates prevailing on the date ofthe transaction. Monetary assets and liabilities aretranslated at the rate prevailing on the BalanceSheet date whereas non-monetary assets andliabilities are translated at the rate prevailing on thedate of the transaction. Gains and losses resultingfrom the settlement of foreign currency monetaryitems and from the translation of monetary assetsand liabilities denominated in foreign currencies arerecognised in the Statement of Profit and Loss.

iii) Financial instruments

A. Initial Recognition and Measurement

The Company recognizes financial assetsand liabilities when it becomes a party to thecontractual provisions of the instrument. Allfinancial assets and liabilities are recognizedat fair value on initial recognition, except fortrade receivables which are initially measuredat transaction price. Transaction costs that aredirectly attributable to the acquisition or issue offinancial assets and liabilities that are not at fairvalue through profit or loss are added to the fairvalue on initial recognition. Regular purchaseand sale of financial assets are recognised onthe trade date.

B. Subsequent Measurement

1. Non-Derivative Financial Instruments

a) Financial Assets Carried at Amortised Cost A financial asset is subsequently measured atamortised cost if it is held within a businessmodel whose objective is to hold the asset inorder to collect contractual cash flows and thecontractual terms of the financial asset giverise on specified dates to cash flows that aresolely payments of principal and interest on theprincipal amount outstanding.

b) Financial Assets at Fair Value Through OtherComprehensive Income (FVOCI)

A financial asset is subsequently measured at fairvalue through other comprehensive income if it isheld within a business model whose objective isachieved by both collecting contractual cash flows and selling financial assets and the contractual

terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

c) Financial Assets at Fair Value Through Profit orLoss (FVTPL) A financial asset which is not classified in any ofthe above categories are subsequently fair valuedthrough profit or loss.

d) Financial Liabilities Financial liabilities are subsequently carried atamortized cost using the effective interest method.For trade and other payables maturing within oneyear from the Balance Sheet date, the carryingamounts approximate fair value due to the shortmaturity of these instruments.

e) Derivative Instruments The Company holds derivative financialinstruments such as foreign exchange forwardsto mitigate the risk of changes in exchange rateson foreign currency exposures. The counterpartyfor these contracts is generally a bank. Derivatives are recognized and measured at fair value.

Cash flow hedges: Changes in the fair value ofthe derivative hedging instrument designatedas a cash flow hedge are recognized in othercomprehensive income and presented withinequity in the cash flow hedging reserve to theextent that the hedge is effective. To the extentthat the hedge is ineffective, changes in fairvalue are recognized in the statement of profitand loss.

C. Derecognition of Financial Instruments The Company derecognises a financial assetwhen the contractual right to receive the cashflows from the financial asset expire or it transfers the financial asset.

A financial liability is derecognised when theobligation under the liability is discharged,cancelled or expires.

iv) Current Versus Non-Current Classification

i) An asset is considered as current when it is:

a) Expected to be realized or intended to besold or consumed in normal operating cycle



b) Held primarily for the purpose of trading

c) Expected to be realised within twelvemonths after the reporting period,

d) Cash or cash equivalent unless restrictedfrom being exchanged or used to settle aliability for at least twelve months after thereporting period.

ii) All other assets are classified as non-current.

iii) liability is considered as current when it is:

a) Expected to be settled in normal operating cycle


c) Due to be settled within twelve monthsafter the reporting period, or

d) There is no unconditional right to defer thesettlement of the liability for at least twelvemonths after the reporting period.

iv) All other liabilities are classified as non-current

Deferred tax assets and liabilities are classified asnon-current assets and liabilities

v) Property, Plant & Equipment

Property, plant and equipment are stated at cost,less accumulated depreciation and impairment,if any. Costs directly attributable to acquisitionare capitalized until the property, plant andequipment are ready for use, as intended bymanagement.

An item of property, plant and equipmentand any significant part initially recognised isderecognised upon disposal or when no futureeconomic benefits are expected from its use ordisposal. Any gain or loss arising on derecognition of the asset is included in the Statement of Profitor Loss when the asset is derecognised.

For transition to Ind AS, the Company haselected to continue with the carrying valueof all its property, plant and equipmentrecognised as on April 1, 2016 measured asper previous GAAP as it deemed cost on thedate of transition.

The Company depreciates property, plant andequipment over their estimated useful lives usingthe straight-line method. The estimated usefullives of assets are as follows:

Category Useful Life

Building 25 - 30 years

Computers 2 years

Plant and Machinery 2 - 5 years

Furniture and fixtures 5 years

Office Equipment 5 years

Vehicles 2 - 5 years

Leasehold Improvements 5 years or the primary period of lease whichever is less

Leasehold land Lease Term ranging from 95-99 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

vi) Intangible assets

Intangible assets acquired separately aremeasured at cost of acquisition. Following initialrecognition, intangible assets are carried at costless accumulated amortization and impairmentlosses, if any.

The amortization of an intangible asset with afinite useful life reflects the manner in which theeconomic benefit is expected to be generated.

The estimated useful life of amortizableintangibles are reviewed and where appropriateare adjusted, annually.

The estimated useful lives of the amortizableintangible assets for the current and comparativeperiods are as follows:


Computer Software 1 - 5 years

vii) Leases

Leases where significant portion of risk andreward of ownership are retained by the lessor,are classified as operating leases and leasepayments are recognised as an expense on astraight line basis in Statement of Profit and Lossover the lease term.

Finance leases that transfer substantiallyall of the risks and benefits incidental toownership of the leased item are capitalized atcommencement of the lease at the fair value ofthe leased property or, if lower, at the presentvalue of the minimum lease payments. Leasepayments are apportioned between finance


113Mastek Limited


losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

ix) Employee Benefits

A. Long Term Employee Benefits

a) Defined Contribution Plan

The Company has defined contributionplans for post employment benefits inthe form of provident fund, employees’state insurance, labour welfare fund andsuperannuation fund in India which areadministered through Government ofIndia and/or Life Insurance Corporationof India (LIC). Under the definedcontribution plans, the Company has nofurther obligation beyond making thecontributions. Such contributions arecharged to the Statement of Profit andLoss as incurred.

b) Defined Benefit Plan

The Company has defined benefit plansfor post employment benefits in the formof gratuity for its employees in India.The gratuity scheme of the Companyis administered through Life InsuranceCorporation of India (LIC). Liability fordefined benefit plans is provided on thebasis of actuarial valuations, as at theBalance Sheet date, carried out by anindependent actuary. The actuarial valuation method used by independent actuary formeasuring the liability is the projected unitcredit method.

Actuarial gains or losses are recognized in other comprehensive income. Further, the profit or loss does not include an expected return on plan assets. Instead net interest recognized in profit or loss is calculated by applying the discount rate used to measure the defined benefit obligation to the net defined benefit liability or asset. The actual return on the plan assets above or below the discount rate is recognized as part of re-measurement of net defined liability or asset through other comprehensive income.

charges and a reduction in the lease liability so as to achieve a constant rate of interest on the remaining balance of liability. Finance charges are recognised in finance cost in the statement of profit and loss.

viii) Impairment of assets

a) Non Financial Instrument

Intangible assets and property, plant andequipment are evaluated for recoverabilitywhenever events or changes in circumstancesindicate that their carrying amounts may notbe recoverable. For the purpose of impairmenttesting, the recoverable amount (i.e. the higherof the fair value less cost to sell and the valuein-use) is determined on an individual assetbasis unless the asset does not generate cashflows that are largely independent of thosefrom other assets. In such cases, the recoverableamount is determined for the Cash GeneratingUnit to which the asset belongs.

If such assets are considered to be impaired,the impairment to be recognized in theStatement of Profit and Loss is measured bythe amount by which the carrying value ofthe assets exceeds the estimated recoverableamount of the asset. An impairment loss isreversed in the statement of profit and loss ifthere has been a change in the estimates usedto determine the recoverable amount. Thecarrying amount of the asset is increased to itsrevised recoverable amount, provided that thisamount does not exceed the carrying amountthat would have been determined (net of anyaccumulated amortization or depreciation)had no impairment loss been recognised forthe asset in prior years.

b) Financial instrument

The Company assesses at each date of balancesheet whether a financial asset or a group offinancial assets is impaired. Ind AS 109 requiresexpected credit losses to be measured through aloss allowance. The Company recognises lifetimeexpected losses for all contract assets and / orall trade receivables that do not constitute afinancing transaction. For all other financialassets, expected credit losses are measured at anamount equal to the 12 months expected credit



Remeasurement comprising of actuarial gains or losses and return on plan assets (excluding amounts included in net interest on the net defined benefit liability) are not reclassified to profit or loss in subsequent periods.

c) Other long-term employee benefits

The employees of the Company are alsoentitled for other long-term benefit in theform of compensated absences as per thepolicy of the Company. Employees areentitled to accumulate leave balance up tothe upper limit as per the Company’s policies which can be carried forward perpetually.Leave encashment for employees getstriggered on an annual basis, if theaccumulated leave balance exceeds theupper limit of leave. Further, at the timeof retirement, death while in employmentor on termination of employment leaveencashment vests equivalent to salarypayable for number of days of accumulatedleave balance. Liability for such benefits isprovided on the basis of actuarial valuations, as at the Balance Sheet date, carried outby an independent actuary. The actuarialvaluation method used by independentactuary for measuring the liability is theprojected unit credit method.

B. Short-term employee benefits

The undiscounted amount of short termemployee benefits expected to be paid inexchange for the services rendered by employeesis recognised in the year during which theemployee rendered the services. These benefitscomprise compensated absences such as paidannual leave and performance incentives.

a) Termination benefits

Termination benefits, in the nature of voluntary retirement benefits or those arising from restructuring, are recognised in the Statement of Profit and Loss when the Company has a present obligation as a result of past event, when a reliable estimate can be made of the amount of the obligation and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligations.

x) Share Based Payments

The Company determines the compensation costbased on the fair value method in accordancewith Ind AS 102 Share Based Payment. TheCompany grants options to its employees whichwill be vested in a graded manner and are tobe exercised within a specified period. Thecompensation cost is amortized on an gradedbasis over the vesting period. The share basedcompensation expense in determined based onthe Company’s estimate of equity instrumentthat will eventually vest.

xi) Provisions & Contingent Liabilities

Provisions are recognised when the Company hasa present obligation as a result of past events, forwhich it is probable that an outflow of resourcesembodying economic benefits will be required tosettle the obligation, and a reliable estimate of theamount can be made. A disclosure for a contingentliability is made where there is a possible obligationthat arises from past events and the existence ofwhich will be confirmed only by the occurrenceor non occurrence of one or more uncertainfuture events not wholly within the control of theCompany or a present obligation that arises fromthe past events where it is either not probable thatan outflow of resources will be required to settlethe obligation or a reliable estimate of the amountcannot be made. Provisions are reviewed regularlyand are adjusted where necessary to reflect thecurrent best estimates of the obligation. Where theCompany expects a provision to be reimbursed, the reimbursement is recognized as a separate asset,only when such reimbursement is virtually certain.

xii) Revenue Recognition

The Company derives revenue primarily frominformation technology services. The Companyrecognizes revenue when the significant terms ofthe arrangement are enforceable, services havebeen delivered and the collectability is reasonablyassured. The method for recognizing revenuesand costs depends on the nature of the servicesrendered:

a) Time and materials contracts Revenues and costs relating to time andmaterials contracts are recognized as therelated services are rendered.


115Mastek Limited


xiii) Income Tax

Tax expense for the year comprises of currenttax and deferred tax. Current tax is measured bythe amount of tax expected to be paid to thetaxation authorities on the taxable profits afterconsidering tax allowances and exemptions andusing applicable tax rates and laws. Deferred taxis recognised on timing differences between theaccounting base and the taxable income for theyear and quantified using the tax rates and taxlaws enacted or substantively enacted as on theBalance Sheet date.

Deferred income tax is recognized using thebalance sheet approach. Deferred incometax assets and liabilities are recognized fordeductible and taxable temporary differencesarising between the tax base of assets andliabilities and their carrying amount in financialstatements, except when the deferred incometax arises from the initial recognition ofgoodwill or an asset or liability in a transactionthat is not a business combination and affectsneither accounting nor taxable profits or loss atthe time of the transaction.

Deferred income tax asset is recognized tothe extent that it is probable that taxableprofit will be available against which thedeductible temporary differences, and thecarry forward of unused tax credits andunused tax losses can be utilized. Deferredincome tax liabilities are recognized for alltaxable temporary differences.

Minimum Alternative Tax (MAT) credit isrecognised as an asset only when and tothe extent there is convincing evidence thatthe Company will pay normal income taxduring the specified period. Such asset isreviewed at each balance sheet date and thecarrying amount of the MAT credit asset iswritten down to the extent there is no longerconvincing evidence to the effect that theCompany will pay normal income tax duringthe specified period.

Current tax and deferred tax assets and liabilities areoffset when there is a legally enforceable right to setoff the recognised amount and there is an intentionto settle the asset and liability on a net basis.

b) Fixed price contract

Revenues from fixed-price contracts arerecognized using the “percentage-of-completion” method. Percentage ofcompletion is determined based on projectcosts incurred to date as a percentage oftotal estimated project costs required tocomplete the project. The cost expended (orinput) method has been used to measureprogress towards completion as there isa direct relationship between input andproductivity.

If the Company does not have a sufficient basis to measure the progress of completion or to estimate the total contract revenues and costs, revenue is recognized only to the extent of contract cost incurred for which recoverability is probable.

“Unbilled revenue” represents cost and earning in excess of billing as at the end of the reporting period. “Unearned revenue” represents billing in excess of revenue recognized. Advance payment received from customer for which no services have been rendered are presented as “Unearned revenue”

c) Maintenance contract

Revenue from maintenance contracts isrecognized ratably over the period of thecontract.

When services are performed throughan indefinite number of repetitive actsover a specified period of time, revenueis recognized on a straight line basis overthe specified period or under some othermethod that better represents the stageof completion.

Revenues are shown net of goods and service tax,sales tax, value added tax, service taxand applicable discounts and allowances.

d) Multiple element arrangements

The Company allocates the arrangementconsideration to separately identifiablecomponents based on the cost plusmargin method.



xiv) Other Income

Other income comprises interest income ondeposits, dividend income and gains / (losses) ondisposal of investments except investments fairvalue through OCI. Interest income is recognizedusing the effective interest method. Dividendincome is recognized when the right to receivepayment is established.

xv) Finance income and expenses

Finance costs comprises interest cost onborrowings, gain or losses arising on re-measurement of financial assets at FVTPL, gains/(losses) on translation or settlement of foreigncurrency borrowings and changes in fair valueand gains/ (losses) on settlement of relatedderivative instruments. Borrowing costs that arenot directly attributable to a qualifying asset arerecognized in the statement of profit and lossusing the effective interest method.

xvi) Earnings per share

Basic earnings per share is calculatedby dividing the net profit or loss for theperiod attributable to equity Shareholdersof the Company by the weighted averagenumber of equity shares outstanding duringthe period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity Shareholders of the Company and the weighted average number of shares outstanding during the period, are adjusted for the effects of all dilutive potential equity shares.

xvii) Cash and cash equivalents

Cash and cash equivalents include cash in hand,demand deposits with banks and other shortterm highly liquid investments with originalmaturities of three months or less.

xviii) Investment Property

Property that is held either for long term rentalyield or for capital appreciation or both, butnot for sale in ordinary course of the business,use in the production or supply of goods orservices or for administrative purposes. Uponinitial recognition, an investment propertyis measured at cost. Subsequent to initialrecognition, investment property is measuredat cost less accumulated depreciation andaccumulated impairment,if any.

Any gain or loss on disposal of an investment property is recognised in profit and loss.


117Mastek Limited


3(a) Property plant and equipments

Particulars

Gross Block (at cost) Depreciation Net BlockAs at

April 1, 2017

Additions Deductions As at March 31,

2018

As at April 1,

2017

For the year

Deductions As at March 31,

2018

As at March 31,

2018

As at March 31,

2017(i) Own assets :Buildings 4,749 - (12) 4,737 1,798 165 (12) 1,951 2,786 2,951 Computers 2,438 204 (412) 2,230 2,278 168 (412) 2,034 196 160 Plant and equipment 2,795 156 (558) 2,393 2,579 97 (558) 2,118 275 216 Furniture and fixtures 4,604 113 (3) 4,714 4,118 156 (3) 4,271 443 486 Vehicles 206 85 (15) 276 95 43 (15) 123 153 111 Office equipment 1,613 278 (220) 1,671 1,514 59 (220) 1,353 318 99 Total (i) 16,405 836 (1,220) 16,021 12,382 688 (1,220) 11,850 4,171 4,023 (ii) Leased assets :Leasehold land 386 - - 386 304 4 - 308 78 82 Leasehold improvements 334 - - 334 334 - - 334 - 0 Vehicles 113 - (14) 99 68 18 (7) 79 20 45 Total (ii) 833 - (14) 819 706 22 (7) 721 98 127

Total (i + ii) 17,238 836 (1,234) 16,840 13,088 710 (1,227) 12,571 4,269 4,150

3(b) Intangible assetsGross Block (at cost) Amortisation Net Block

As at April 1,

2017


2018

As at April 1, 2017

For the year


2018

As at March 31,

2018

As at March 31,

2017Computer software 4,124 360 (1,691) 2,793 3,796 409 (1,691) 2,514 279 328 Total 4,124 360 (1,691) 2,793 3,796 409 (1,691) 2,514 279 328

3(a) Property plant and equipments

Particulars

Gross Block (at cost) Depreciation Net Block

As at April 1,

2016


2017

As at April 1, 2016

For the year


2017

As at March 31,

2017

As at April 1,

2016

(i) Own assets :Buildings 4,749 - - 4,749 1,708 90 - 1,798 2,951 3,041 Computers 2,276 162 - 2,438 1,977 301 - 2,278 160 299 Plant and equipment 2,632 163 - 2,795 2,501 78 - 2,579 216 131 Furniture and fixtures 4,329 275 (0) 4,604 3,967 151 (0) 4,118 486 362 Vehicles 246 80 (120) 206 156 38 (99) 95 111 90 Office equipment 1,590 24 (1) 1,613 1,466 49 (1) 1,514 99 124 Total (i) 15,822 704 (121) 16,405 11,775 707 (100) 12,382 4,023 4,047 (ii) Leased assets :Leasehold land 386 - - 386 226 78 - 304 82 160 Leasehold improvements 334 - - 334 334 - - 334 0 - Vehicles 97 23 (7) 113 52 20 (4) 68 45 45 Total (ii) 817 23 (7) 833 612 98 (4) 706 127 205

Total (i + ii) 16,639 727 (128) 17,238 12,387 805 (104) 13,088 4,150 4,252

3(b) Intangible assets

Particulars

Gross Block (at cost) Depreciation Net BlockAs at

April 1, 2016


2017

As at April 1, 2016

For the year

Deductions As at March 31, 2017

As at March 31, 2017

As at April 1,

2016Computer software 3,692 432 - 4,124 3,348 448 - 3,796 328 344 Total 3,692 432 - 4,124 3,348 448 - 3,796 328 344

Notes to the Financial StatementsFor the year ended March 31, 2018(All amounts in ` Lakhs, unless otherwise stated)


4 FINANCIAL ASSETS

(a) Investments

Particulars As at

March 31, 2018 March 31, 2017 April 1,2016(A) Investment property (at cost less accumulated depreciation) *

Gross blockOpening 2 2 389 Less: Transferred pursuant to a scheme of arrangement - - (387)Closing 2 2 2 Less : Accumulated depreciationOpening 2 2 149 Less: Transferred pursuant to a scheme of arrangement - - (147)Closing 2 2 2 Net block - - -

Aggregate amount of investment property* Fair Value of the investment property as at March 31,2018 is 130 lakhs(B) Investment in equity instruments

Mastek (UK) Ltd.200,000 (March 31, 2017 - 200,000, April 1, 2016 - 200,000)Equity Shares of £ 1 each, fully paid up

216 216 216

Trans American Information Systems Private Limited 34,520 equity shares (March 31, 2017 - 34,520, April 1, 2016- Nil) of ` 10 each, fully paid up

1,187 1,187 -

Total 1,403 1,403 216 (C) Investment in share warrant at FVTPL

Investment in Cashless Technologies India Private Limited Share warrants (March 31, 2018- 8,000,000,March 31, 2017 -8,000,000, April 1, 2016 - NIL)

- 1 -

Total - 1 - Total (A + B + C) 1,403 1,405 216

b. Loans

Particulars As at

March 31, 2018 March 31, 2017 April 1,2016Unsecured, Considered good

Security Deposits 89 113 109 89 113 109

c. Other non-current financial Assets

Particulars As at

March 31, 2018 March 31, 2017 April 1,2016Advances to employees - 1 1 Foreign exchange forward contract - 282 257 Guarantee Commission Receivable 202 317 -

202 600 258

5 OTHER NON-CURRENT ASSETS

Particulars As at

March 31, 2018 March 31, 2017 April 1,2016Capital advances 47 30 72 Prepaid expenses 0 2 2 Other loans and advances

Other advances 39 39 58 86 71 132


119Mastek Limited


6 FINANCIAL ASSETS(a) Investments

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Units Amount Units Amount Units Amount

(i) Investment in mutual funds(A) Investment in mutual funds(quoted - FVTPL):Birla Sun Life Floating Rate Fund - Short Term Plan - Regular -Growth

- - 21,143 46 - -

Mahindra Liquid Fund - Regular - Growth - - 13,726 144 - -Indiabulls Liquid Fund - Growth - - 13,045 206 - -IDFC Cash Fund -Growth- Regular Plan - - 3,054 60 - -Baroda Pioneer Liquid Fund - Plan A - Growth - - 14,085 263 37,027 643Birla Sun Life Cash Plus Fund - Growth 1,50,457 419 - - 2,46,814 599ICICI Prudential Money Market Fund - Growth - - 90,678 204 71,787 150UTI-Fixed Income Interval Fund Quarterly Interval Plan II 9,54,827 202 - - - -HDFC FMP 92D FEBRUARY 2018(1) (7.40%) 5,00,000 50 - - - -IDFC Yearly Series Interval Fund - Regular -Series II - Growth(9%)

10,02,363 151 - - - -

Reliance Quarterly Interval Fund Series II 8,46,468 202 - - - -Total (A) 1,024 923 1,392(B) Investment in mutual funds (quoted - FVOCI):Kotak Floater Short Term Fund - Growth - - - - 8,064 200Franklin India TMA - Super IP - Growth - - - - 9,282 210Kotak Treasury Advantage Fund - Reg - Growth - - 19,46,216 507 17,64,200 426Sundaram Ultra Short Term - Reg – Growth - - - - 21,86,228 452ICICI Prudential Ultra Short Term Plan - Growth - - 14,59,579 243 29,88,941 458UTI Short Term Income Fund 26,77,937 566 17,21,850 343 - -Kotak Corporate Bond Fund Standard Growth (Regular Plan) 41,894 956 31,422 671 - -HDFC Cash Mgmt Fund - Treasury Advantage Ret Growth 23,96,953 877 - - - -IDFC Corporate Bond Fund Regular Plan Growth 79,00,114 939 58,90,210 658 - -IDFC Credit Opportunities Fund Regular Plan Growth 48,56,963 521 - - - -Kotak Low Duration Fund -Growth 45,658 969 32,312 641 - -Kotak Treasury Advantage Fund - Reg - Growth 20,17,768 561 - - - -Birla Sun Life Floating Rate Fund - Long Term Plan - Regular -Growth

1,22,776 261 1,22,776 244 - -

ICICI Prudential-Flexible Income Plan - Regular - Growth 5,73,138 1,910 6,16,067 1,918 - -HDFC Cash Management Fund - Treasury Advantage RetGrowth

- - 41,62,273 1,430 - -

Reliance Corporate Bond Fund –Growth Plan 7,25,674 102 - - - -UTI Treasury Advantage Fund Institutional Plan - Growth 1,03,699 2,484 1,03,699 2,324 - -Total (B) 10,146 8,979 1,746Total (A+B) 11,170 9,902 3,138(ii) Investment in term deposit (unquoted):Term deposit with Housing Development Finance Corporation 600 600Total 600 600 -Grand Total 11,770 10,502 3,138Aggregate market value of quoted investments 11,170 9,902 3,138Aggregate amount of unquoted investment 600 600 -



(b) Trade receivables

Particulars As at

March 31, 2018 March 31, 2017 April 1, 2016Unsecured

Considered Good 2,602 1,435 5,405 Considered Doubtful 256 180 148 Less: Provision for doubtful debts (256) (180) (148)

2,602 1,435 5,405

(c) Cash and bank balances

Particulars As at

March 31, 2018 March 31, 2017 April 1, 2016Cash and cash equivalents 1 3 3

Cash on handBank balances 1,198 315 429

In current accounts - 54 978 Fixed deposits 1,199 372 1,410

Other bank balances Fixed deposits (with original maturity more than 3 months but less than 12 months)

- - 2,095

Unpaid dividend account* 29 25 39 29 25 2,134

* Other bank balance represents earmarked balance in respect of unpaid dividend.

(d) Loans

Particulars As at

March 31, 2018 March 31, 2017 April 1, 2016Unsecured, Considered good

Security Deposits 5 4 14 5 4 14

(e) Other current financial assets

Particulars As at

March 31, 2018 March 31, 2017 April 1, 2016Advances to employees 40 14 43 Interest accrued on fixed deposits 46 3 89 Margin money deposit 1 1 2 Unbilled revenue 419 512 313 Other receivable from subsidiary 118 36 - Reimbursable expenses receivable 81 95 137 Foreign exchange forward contract - 1,668 841 Tax credit receivable, net of provision - 621 - Guarantee Commission Receivable 87 87 -

792 3,037 1,425


121Mastek Limited


7 OTHER CURRENT ASSETS

Particulars As at

March 31, 2018 March 31, 2017 April 1, 2016Surplus contribution to employee benefit plan - gratuity [Refer Note 23] 73 - 29 Prepaid expenses 237 229 91 Advances to suppliers 176 4 145 Input credit receivable 276 71 56 Interest accrued on Income tax refunds - - 54

762 304 375

8 EQUITY SHARE CAPITAL

Particulars As at

March 31, 2018 March 31, 2017 April 1, 2016Authorised: - - 40,000,000 (March 31, 2017: 40,000,000; April 1, 2016: 40,000,000) equity shares of ` 5/- each

2,000 2,000 2,000

2,000,000 (March 31, 2017: 2,000,000; April 1, 2016: 2,000,000) preference shares of ` 100/- each

2,000 2,000 2,000

4,000 4,000 4,000 Issued, subscribed and fully paid up :23,692,056 (March 31, 2017 :23,377,533; April 1, 2016 : 22,997,274) equity shares of ` 5/- each fully paid

1,185 1,169 1,150

1,185 1,169 1,150

(a) Reconciliation of the number of equity shares outstanding at the beginning and end of the year are asgiven below:

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016No. of shares Amount No. of shares Amount No. of shares Amount

Equity SharesBalance as at the beginning of the year 23,377,533 1,169 22,997,274 1,150 22,546,672 1,127 Add: Addition on account of exercise of employee stock option plans

314,523 16 380,259 19 450,602 23

Balance as at the end of the year 23,692,056 1,185 23,377,533 1,169 22,997,274 1,150

(b) Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value of ` 5/- per share. Each shareholder is eligible for onevote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in theensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholdersare eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion totheir shareholding.



(c) Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company

Particulars

As at

March 31, 2018 March 31, 2017 April 1, 2016

No. of shares

% of holding

No. of shares

% of holding

No. of shares

% of holding

Equity Shares of ` 5/- each held by :Ashank Desai 3,099,552 13.1% 3,099,552 13.3% 3,099,552 13.5%Sudhakar Ram 1,588,680 6.7% 2,791,680 11.9% 2,791,680 12.1%Ketan Mehta 2,399,100 10.1% 2,519,100 10.8% 2,519,100 11.0%Fidelity Purita Trust Fidelity Low Priced * - 0.0% - 0.0% 1,275,000 5.5%Radhakrishnan Sundar 1,415,800 6.0% 1,445,800 6.2% 1,445,800 6.3%

* Shareholding as at March 31, 2018 & March 31,2017 is reduced to less than 5%.

(d) Shares reserved for issue under options

Particulars As at

March 31, 2018 March 31, 2017 April 1, 2016Number of shares to be issued under the Employee Stock Option Plans 2,324,638 2,327,292 2,739,627

(e) Shares bought back (during 5 years immediately preceding March 31, 2018)

ParticularsMarch 31,

2018March 31,

2017March 31,

2016March 31,

2015March 31,

2014Equity Shares bought back - - - - 2,484,007

9 OTHER EQUITY

Particulars As at


Capital redemption reserve 1,539 1,539 1,539 Any profit or loss on purchase and sale, issue and cancellation of the company own equity instrument transferred in capital reserveSecurity Premium 1,772 1,381 1,081 Amount received (on issue of shares) in excess of the par value has been classified as securities premiumEmployee stock options outstanding account 1,029 802 707 The share option outstanding account is used to record the value of equity-settled share based payment transactions with employees. The amounts recorded in this account are transferred to share premium upon exercise of stock options by employees. In case of forfeiture, corresponding balance is transferred to general reserve.Retained earnings 17,105 16,594 14,494 Retained earnings comprises of the prior year's undistributed earning after taxesOther item of other comprehensive income 200 1,515 725 Other item of other comprehensive income consist of FVOCI financial assets and financial liabilities and remeasurement of defined benefit assets and liability

21,645 21,831 18,546


123Mastek Limited


NON-CURRENT LIABILITIES

10 FINANCIAL LIABILITIES

(a) Borrowings

Particulars As at


Vehicle loans from financial institution [Refer note (i) below] 73 15 -

Long term maturities of finance lease obligations in respect of vehicles [Refer note (ii) below]

- 23 18

73 38 18

(i) Loans from financial institution are secured by hypothecation ofassets (Vehicles) underlying the loans.

Monthly payment of Equated monthly instalments beginning from the month subsequent to taking the loan along with interest at 8.75%.

(ii) Finance lease obligations are secured by hypothecation of assets(Vehicles) underlying the leases.

Monthly payment of Equated Monthly Instalments beginning from the month subsequent to taking the lease along with interest.

(b) Other non-current financial liabilities

Particulars As at


Security and other deposits 111 107 72

Guarantee Liability payable 240 326 - Foreign exchange forward contract 409 - -

760 433 72

11 PROVISIONS

Particulars As at


Provision for employee benefitsProvision for gratuity [Refer Note 23] - 85 -

Provision for leave encashment 321 495 469 Other provisions

Provision for cost overrun on contracts 26 26 25 347 606 494

9.1 Distributions made and proposed

The Board of Directors at its meeting held on April 20, 2017 had recommended a final dividend of 50% (` 2.5 per equity share of par value ` 5 each). The proposal was approved by shareholders at the Annual General Meeting held on June 22, 2017, this has resulted in a cash outflow of ̀ 585 lakhs, inclusive of dividend distribution tax. Also, the Board of Directors at its meeting held on October 26, 2017, had declared an interim dividend of 40% (` 2 per equity share of par value of ` 5 each) for the quarter ended September 30, 2017. Further, the Board of Directors at its meeting held on April 18, 2018 have recommended a final dividend of 80% (` 4 per equity share of par value ` 5 each) which is subject to approval of shareholders. If approved, this would result in a cash outflow of approximately ` 948 lakhs, exclusive of dividend distribution tax.



CURRENT LIABILITIES

12 FINANCIAL LIABILITIES

(a) Trade payables

Particulars As at


Trade payables 299 175 382

299 175 382

(b) Other financial liabilities

Particulars As at


Current maturities of finance lease in respect of vehicles - 25 30

Current maturities of vehicle loans from financial institutions 18 3 - Unpaid dividends (Refer note (a) below) 29 25 39 Security and other deposits 2 5 0 Other payable to subsidiary - 165 - Other payables

Employee benefits payable 757 476 671 Accrued expenses 1,376 1,189 1,780 Foreign exchange forward contract 337 - - Guarantee Liability payable 87 87 -

2,606 1,975 2,520 Note:

(a) There is no amount due for payment to Investor Education and Protection Fund under Section 125 of the Companies Act,2013 as at March 31, 2018.

13 OTHER CURRENT LIABILITIES

Particulars As at


Unearned revenue 33 196 286 Statutory dues (including stamp duty, provident fund and tax deducted at source)

526 554 393

Capital creditors 193 45 25 Deferred Rent 19 27 25

771 822 729

14 PROVISIONS

Particulars As at


Provision for employee benefitsProvision for leave encashment 124 126 551

124 126 551


125Mastek Limited


15 REVENUE FROM OPERATIONS

Particulars Year ended

March 31, 2018 March 31, 2017

Information technology services 16,232 16,040

Other operating revenueOne time fee - 908

16,232 16,948

16 OTHER INCOME


March 31, 2018 March 31, 2017

Interest income

On fixed deposits 44 92 On income tax refunds 72 118 On others 17 10 On guarantee 40 12

Recovery of debts written off earlier 1 40 Recovery of doubtful debts 14 102 Dividend income from current investments 6 - Dividend income from UK subsidiary 997 237 Profit on sale of tangible assets, net - 4 Profit on sale of current investments 340 305 Rental income 249 256 Net gain on foreign currency transactions and translation 405 - Others 138 106

2,323 1,282

17 EMPLOYEE BENEFITS EXPENSES


March 31, 2018 March 31, 2017

Salaries, wages and performance incentives 10,308 8,938

Gratuity (Refer Note 23) 231 202 Contribution to provident and other funds 408 388 Employee stock compensation expenses 174 83 Staff welfare expense 246 267

11,367 9,878

18 FINANCE COSTS


March 31, 2018 March 31, 2017

Interest on finance lease 5 11

Bank charges 4 6 Other finance charges 10 7

19 24



19 DEPRECIATION AND AMORTISATION EXPENSES


March 31, 2018 March 31, 2017

Depreciation on tangible assets 710 805

Amortisation on intangible assets 409 448 Less: Reimbursement of common cost received from Majesco Limited and Majesco software and Solutions India Private Limited

- (49)

1,119 1,204

20 OTHER EXPENSES


March 31, 2018 March 31, 2017

Hire charges 60 82

Recruitment and training expenses 37 61 Travelling and conveyance 409 474 Communication charges 91 121 Electricity 303 364 Consultancy and sub-contracting charges 602 598 Audit Fees (Refer note 38) 47 67 Rates and taxes 112 147 Repairs to buildings 252 310 Repairs : others 357 488 Insurance 107 53 Printing and stationery 19 24 Professional fees 597 712 Rent 68 76 Advertisement and publicity 20 157 Expenditure towards corporate social responsibility (CSR) activities (Refer note 39) 84 130 Net loss on foreign currency transactions and translation - 251 Provision / (Reversal) for doubtful debts and loans and advances, net 88 136 Bad debt written off 16 10 Provision for cost overrun on contracts, net - 1 Loss on sale of tangible assets, net 1 - Miscellaneous expenses 46 119

3,316 4,381

21 EXCEPTIONAL ITEMS, NET


March 31, 2018 March 31, 2017

Others - 340

- 340


127Mastek Limited


22 EARNINGS PER SHARE (EPS)


March 31, 2018 March 31, 2017

The components of basic and diluted earnings per share for total operations are as follows:

(a) Net profit attributable to equity shareholders 1,574 2,312 (b) Weighted average number of outstanding equity shares

Considered for basic EPS 23,521,823 23,214,937 Add : Effect of dilutive potential equity shares arising from outstanding stock

options 1,335,225 1,003,614

Considered for diluted EPS 24,857,048 24,218,551 (c) Earnings per share in `

Basic 6.69 9.96 Diluted 6.33 9.55

(Face value per share ` 5/- each)

23 EMPLOYEE BENEFIT PLANS

Amount recognized in the statement of profit and loss in respect of gratuity cost (defined benefit plan) is as follows:


March 31, 2018 March 31, 2017

Gratuity Cost

Service cost 232 212 Net interest on net defined liability/(asset) (1) (10)Net gratuity cost 231 202 Actuarial (Gain) / Loss charged to Other Comprehensive Income 390 1Interest rate 7.75% 7.60%Salary increase 10% 10%

The estimates of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

The following table sets out the status of gratuity plan.

Particulars As at


Obligation at the beginning of the year 1,920 1,764 3,662 Service cost 232 212 259 Interest cost 141 135 175 Actuarial (gain)/loss- financial assumption (15) 83 (167)Actuarial (gain)/loss- experience (142) (96) - Liabilities assumed on acquisition/(settled on divestiture) - - (1,964)Actuarial (gain)/loss- Demographic assumptions (245) - - Benefits paid (151) (178) (201)Obligation at the end of the year 1,740 1,920 1,764 Change in plan assetsPlan assets at the beginning of the year, at fair value 1,835 1,793 3,784 Employer Contribution - 86 0 Interest income on plan assets 141 146 205 Assets acquired on acquisition/ (distributed on divestiture) - - (1,964)Remeasurement on plan assets less interest on plan assets (12) (12) (31)Benefits paid (151) (178) (201)Plan assets at the end of the year, at fair value 1,813 1,835 1,793



Historical information

ParticularsAs at

March 31, 2018 March 31, 2017 March 31, 2016 March 31, 2015 March 31, 2014

Present value of defined benefit obligation 1,740 1,920 1,764 3,662 2,884 Fair value of plan assets 1,813 1,835 1,793 3,784 2,157 Asset/(liability) recognized 73 (85) 29 122 (727)

The experience adjustments, meaning difference between changes in plan assets and obligations expected on the basis of actuarial assumption and actual changes in those assets and obligations are as follows:

ParticularsAs at

March 31, 2018 March 31, 2017

Experience adjustment on plan liabilities (402) (13)

Experience adjustment on plan assets 12 12

Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant,would have affected the defined benefit obligation by the amounts shown below:

Particulars

As at

March 31, 2018 March 31, 2017

Increase Decrease Increase Decrease

Discount Rate (50 bps) (49) 52 (103) 112

Salary Growth (50 bps) 50 (48) 109 (101)

Maturity profile of defined benefit obligation:

ParticularsAs at

March 31, 2018 March 31, 2017

1 Year 260 131

2 Year 355 96

3 Year 219 23

4 Year 192 101

5 Year 176 102

6 Year 196 106

7 Year 146 145

8 Year 137 101

9 Year 142 112

10 Year 1,219 4,386

The Company has setup an income tax approved irrevocable trust fund to finance the plan liability. The trustees of the trust fund are responsible for the overall governance of the plan.


129Mastek Limited


24 INCOME TAXES

Income tax expense in the statement of profit and loss consists of:

ParticularsYear ended

March 31, 2018 March 31, 2017

Current income tax

In respect of current year 1,041 (208)

Deferred tax

In respect of current year 119 299

Income tax expense recognised in the statement of profit or loss 1,160 91

Income tax expense recognised in other comprehensive income: (699) 397

The reconciliation between the provision of income tax of the Company and amounts computed by applying the Indian statutory income tax rate to profit before taxes is as follows:


March 31, 2018 March 31, 2017

Profit before tax 2,734 2,403

Enacted income tax rate in India 34.608% 34.608%

Computed expected tax expense 946 832

Effect of:

Additional Provision on account of disallowance before Income tax authorities 299 -

Impact of deferred tax due to change in Income tax rate 128 -

Expenses that are not deductible in determining taxable profit 23 139

Tax credit - (903)

Income subject to different tax rates (172) (41)

Others (64) 64

Total income tax expense recognised in the statement of profit and loss 1,160 91

Deferred tax assets/ (liabilities) as at March 31, 2018, March 31, 2017 & April 1, 2016 in relation to:

Particulars As at


Property, plant and equipment 664 798 892

Provision for doubtful debts 78 63 51

Provision for compensated absence/gratuity 116 253 427

Net gain on fair value of mutual funds (180) (129) (8)

Cash flow hedge 217 (675) (380)

Others 58 63 87

MAT Credit entitlement 2,291 2,374 2,437

Total 3,244 2,747 3,506



25 RELATED PARTY DISCLOSURES

Name of Related Party Nature of relationship Country of Incorporation

Mastek (UK) Limited Subsidiary United Kingdom

IndigoBlue Consulting Limited Step-down Subsidiary United Kingdom

Digility Inc. Step-down Subsidiary United States of America

Trans American Information Systems Inc. Step-down Subsidiary with effect from December 23, 2016

United States of America

Taistech LLC Step-down Subsidiary with effect from December 23, 2016

United States of America


Subsidiary with effect from December 23, 2016 India

Cashless Technologies India Private Limited Entity with common key managerial personnel India

Legal Practice Technologies Limited Joint Venture upto December 6, 2016 United Kingdom

Transaction with above related parties during the year were:-

Name of Related Party Nature of transactionsYear ended

March 31, 2018 March 31, 2017

Mastek (UK) Limited Information Technology Services 12,168 11,249

Other Operating Revenue - One time fees - 908

Dividend received from subsidiary 997 237

Reimbursable / Other expenses recoverable 1,536 404

Reimbursement of Customer Claim - (389)

IndigoBlue Consulting Limited Reimbursable / Other expenses recoverable 37 -

Digility Inc. Information Technology Services 1,056 -

Corporate guarantee - 6,485

Guarantee Commission 156 42

Reimbursable / Other expenses recoverable 23 -

Trans American Information Systems Inc. Reimbursable / Other expenses recoverable 7 -

Taistech LLC Information Technology Services 16 -

Reimbursable / Other expenses recoverable 6 -


Rental Income 1 0

Investment in equity instruments - 1,187

Cashless Technologies India Private Limited Information Technology Services 25 402

Rental Income - 9

Investment in share warrants - 1

Reimbursable / Other expenses recoverable - 4


131Mastek Limited


Balances payable to related parties are as follows:-

Name of Related Party Nature of balancesAs at


Mastek (UK) Limited Trade receivables 1,954 977 4,347

Reimbursements of expenses receivable / (payable)

117 (399) (143)

IndigoBlue Consulting Limited Reimbursements of expenses receivable

1 - -

Digility Inc. Trade receivables 399 42 -

Reimbursements of expenses receivable

1 - -



1 - -

Taistech LLC Trade receivables 16 - -


Security deposits 0 0 -

Cashless Technologies India Private Limited

Trade receivables - 1 -


- 0 -

Security deposits - 5 -

Key Management Personnel (KMP): Sudhakar Ram, Vice Chairman and Managing Director

Ashank Desai, Non Executive Director

Atul Kanagat, Non Executive Director

Keith Bogg, Non Executive Director

Priti Rao, Non Executive Director

S. Sandilya, Non Executive Director

Abhishek Singh, Chief Financial Officer (from September 17, 2016)

Jamshed Jussawalla, Chief Financial Officer (up to September 16, 2016)

Dinesh Kalani, Company Secretary

Compensation of key management personnel of the Company


March 31, 2018 March 31, 2017

Short Term employee benefit 266 194

Share based payment transactions 7 1

Director Sitting fees 79 30

Director Commission Paid 25 16

Total compensation paid to key management personnel 377 241



26 SEGMENT REPORTING

The Company has presented data relating to its segments in its consolidated financial statements which are included in the same annual report as Mastek Limited. In terms of provisions of Indian Accounting Standard, no disclosures related to segments are therefore presented in these standalone financial statements.

27 ACQUISITION OF TRANS AMERICAN INFORMATION SYSTEMS PRIVATE LIMITED

During the previous year, Company has acquired 100% stake in Trans American Information Systems Private Limited, a company engaged in IT consulting and Software Services, for a fixed consideration of 1187 lakhs. Trans American Information Systems Private Limited is a Company with deep routed capability in providing high skilled resources and end to end e-commerce services including strategy, creative design,implementation and managed services having presence in india and supporting US customers.

28 FINANCIAL INSTRUMENTS

The carrying value and fair value of financial instruments by categories as at March 31, 2018, March 31, 2017 and April 1, 2016 is as follows:

As At March 31, 2018

Carrying Value Fair Value

Particulars March 31, 2018

March 31, 2017

April 1, 2016 March 31, 2018

March 31, 2017

April 1, 2016

Financial Assets

Amortised Cost

Loans 94 117 123 94 117 123

Trade Receivables 2,602 1,435 5,405 2,602 1,435 5,405

Cash and Cash Equivalents 1,199 372 1,410 1,199 372 1,410

Other Bank Balances 29 25 39 29 25 39

Other Assets 994 1,687 584 994 1,687 584

Investment in Term Deposits 600 600 2,095 600 600 2,095

Investment in Equity Shares (Unquoted)

1,403 1,405 216 1,403 1,405 216

FVOCI

Investment in MF (Quoted) 10,146 8,979 1,746 10,146 8,979 1,746

Derivative Assets - 1,950 1,098 - 1,950 1,098

FVTPL

Investment in Liquid Fund 1,024 923 1,392 1,024 923 1,392

Total Assets 18,091 17,492 14,108 18,091 17,492 14,108

Financial Liabilities

Amortized Cost

Borrowings 91 66 48 91 66 48

Trade payables 299 175 382 299 175 382

Other liabilities 2,602 2,380 2,562 2,602 2,380 2,562

FVOCI

Derivative Liabilities 746 - - 746 - -

Total Liabilities 3,738 2,621 2,992 3,738 2,621 2,992


133Mastek Limited


29 FAIR VALUE HIERARCHY

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 – Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value on recurring basis as at March 31, 2018, March 31, 2017 and April 1, 2016

Quantitative disclosures of fair value measurement hierarchy for financial assets as at March 31, 2018:

ParticularsFair value measuring using

Date of valuation Total Level 1 Level 2 Level 3Financial liabilities measuring at fair value

Derivative LiabilitiesForeign exchange forward contract March 31, 2018 746 - 746 -

FVTOCI financial assets designated at fair valueInvestment in MF March 31, 2018 10,146 10,146 - -

FVTPL financial assets designated at fair value Investment in Liquid Fund March 31, 2018 1,024 1,024 - -

Quantitative disclosures of fair value measurement hierarchy for financial assets as at March 31, 2017:


Date of valuation Total Level 1 Level 2 Level 3Financial assets measuring at fair value

Derivative AssetsForeign exchange forward contract March 31, 2017 1,950 - 1,950 -

FVTOCI financial assets designated at fair valueInvestment in MF March 31, 2017 8,979 8,979 - -

FVTPL financial assets designated at fair valueInvestment in Liquid Fund March 31, 2017 923 923 - -

Quantitative disclosures of fair value measurement hierarchy for financial assets as at April 01, 2016:


Date of valuation Total Level 1 Level 2 Level 3Financial assets measuring at fair value

Derivative AssetsForeign exchange forward contract April 1, 2016 1,098 - 1,098 -

FVTOCI financial assets designated at fair valueInvestment in MF April 1, 2016 1,746 1,746 - -

FVTPL financial assets designated at fair valueInvestment in Liquid Fund April 1, 2016 1,392 1,392 - -



Derivative financial instrument

The Company’s risk management policy is to hedge substantial amount of forecast transactions under GBP. Hedge is broadly classifies as revenue hedge. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

Risk management is predominately managed by the Finance department of the Company under policies developed by Mastek UK Limited, a wholly owned subsidiary (“MUK”). The Finance department identifies, evaluates and hedges financial risks under the guidance and instructions of MUK which predominantly provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk and use of derivative financial instruments.

The Company, in accordance with its risk management policies and procedures laid down by MUK, enters into foreign currency forward contracts to hedge against foreign currency exposures relating to highly probable forecast transactions. All forward contracts have been designated hedging instrument in cash flow hedge in accordance with Ind AS 109.

The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.

The following table presents the aggregate contracted principal amounts of the Company’s derivative contracts outstanding:

The following ‘’sell‘’ foreign exchange forward contracts are outstanding as at:

Particulars As at


Non Designated derivative instrument 22,792 15,150 15,061

Non Designated derivative instrument in GBP lakhs 240 154 139

No. of Contracts 205 86 53

Forward Contracts covers part of the exposure during the period April 2018 - January 2022

Particulars As at


Opening balance of Mark-to-market gains receivable on outstanding derivative contracts

1,950 1,098 1,881

Less: Released from Hedging reserve account to statement of profit and loss under revenue account upon occurrence of forecasted sales transactions

(1,300) (1,894) (900)

Add: Changes in the value of derivative instrument recognised in Hedging reserve account

(1,396) 2,746 305

Less: Transferred pursuant to a scheme of arrangement - - (188)

Closing balance of Mark-to-market gains receivable on outstanding derivative contracts

(746) 1,950 1,098

Disclosed under:

Other current financial assets (Refer note 6(e)) - 1,668 841

Other non-current financial assets (Refer note 4(c)) - 282 257

Other current financial liabilities (Refer note 12(b)) (337) - -

Other non-currrent financial liabilities (Refer note 10(b)) (409) - -

(746) 1,950 1,098

There were no ineffectiveness recognised in the Statement of profit and loss during the period.


135Mastek Limited


30 FINANCIAL RISK MANAGEMENT

The Company’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivative for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

Business and Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counter party credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Most of the Company doubtful debt pertains to the Public Sector which is undergoing through restructuring and therefore, the Company evaluate every receivable in the geography and create adequate provision after analyzing specific risk.

The following table gives details in respect of revenues generated from top customer and top 5 customers:

ParticularsFor the year ended

March 31, 2018 March 31, 2017

Revenue from Top Customers 12,168 11,249

Revenue from Top 5 Customers 13,935 13,605

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Also, the Company has unutilized credit limits with banks. The Company’s corporate treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management.

The Working Capital position of the Company is given Below

Particulars As at


Cash and Cash Equivalents 1,199 372 1,410

Other bank balances 29 25 39

Investment in MF 11,170 9,902 3,138

Investment in Term Deposit 600 600 2,095

Total 12,998 10,899 6,682



The table below provides details regarding the contractual maturities of significant financial liabilities as at March 31, 2018, March 31, 2017 and April 1, 2016:

ParticularsAs At March 31, 2018

Less than 1 Year 1 Year and above

Borrowings 18 73

Trade Payables 299 -

Other Financial Liabilities 2,251 351

Derivative Financial Liabilities 337 409

ParticularsAs At March 31, 2017


Borrowings 28 38



ParticularsAs At April 1, 2016


Borrowings 30 18



Foreign Currency Risk

The Company’s activities expose it to market risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are used to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.


The Company, in accordance with its risk management policies and procedures laid down by MUK, enters into foreign currency forward contracts to hedge against foreign currency exposures relating to highly probable forecast transactions. The Company does not enter into any derivative instruments for trading or speculative purposes. The counter party is generally a bank. These contracts are for a period between one day and three years.


137Mastek Limited


The following table presents foreign currency risk from non- derivative financial instrument as of March 31, 2018, March 31, 2017 and April 1, 2016.

Particulars

As at


USD $ in lacs INR ` USD $ in lacs INR ` USD $ in lacs INR `

Assets 6 412 1 81 1 62

Liabilities 2 102 1 34 - -

Net Assets/(Liabilities) 310 47 62

As at March 31, 2018, March 31, 2017 and April 1, 2016 respectively, every 1% increase/decrease of the respective foreign currencies compared to functional currency of the Company would impact results by approximately ` 3, ` 1 and ` 1 respectively.

31 CAPITAL MANAGEMENT

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Company’s objective when managing capital is to maintain an optimal structure so as to maximize shareholder value. The capital structure is as follows:

Particulars As at


Total Equity Attributable to the Equity Share Holders of Company

22,830 23,000 19,696

As percentage of total Capital 99.60% 99.71% 99.76%

Current Borrowings 18.17 28.33 30.23

Non Current Borrowings 72.74 37.77 17.79

Total Borrowings 90.91 66.10 48.02

As a percentage of total Capital 0.40% 0.29% 0.24%

Total Capital (Borrowings and Equity) 22,921 23,066 19,744

The Company is predominantly equity financed which is evident from capital structure table. Further, the Company has always been a net cash Company with cash and bank balances along with current financial assets which is predominantly investment in liquid and short term mutual funds being far in excess of debt.

32 FIRST-TIME ADOPTION OF INDIAN ACCOUNTING STANDARD (IND AS)

The Company’s standalone financial statements for the year ended March 31, 2018 are prepared in accordance with Ind ASs notified under the Companies (Indian Accounting Standards) Rules, 2015.

The adoption of Ind AS was carried out in accordance with Ind AS 101, using April 1, 2016 as the transition date. Ind AS 101 requires that all Ind AS standards and interpretations that are effective for the Ind AS Financial Statements for the year ended March 31, 2018, be applied consistently and retrospectively for all fiscal years presented.

All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the standalone financial statements under both Ind AS and Indian GAAP as of the Transition Date have been recognized directly in equity at the Transition Date.



In preparing these financial statements, the Company has availed itself of certain exemptions and exceptions in accordance with Ind AS 101 as explained below:

(a) Exception from full retrospective application:

1. Estimates exception: Upon an assessment of the estimates made under previous GAAP, the management is of the opinionthat there was no need to revise such estimates under Ind AS, except where estimates were required by Ind AS and notrequired by previous GAAP.

(b) Exemption from retrospective application:

1. Share-based payment exemption: The Company has availed exemption available under Ind AS 101 on application of Ind AS102, “Share Based Payment”, to equity instruments that vested before the date of transition to Ind AS.

2. The Company has elected to continue with the carrying value of all its property, plant and equipment including asset heldfor sale as recognised in standalone financial statements as at April 1, 2016 (transition date) to Ind AS measured as per thePrevious GAAP and use that as its deemed cost as at the transition date. On transition to Ind AS, the Company has electedto continue with the carrying value of all of its intangible assets recognised as at April 1, 2016, measured as per the PreviousGAAP, and use that carrying value as the deemed cost of such intangible assets.

3. The Company has designated various hedging relationships as cash flow hedges under the Previous GAAP. On date oftransition to Ind AS, the Company has assessed that all the designated hedging relationship qualifies for hedge accountingas per Ind AS 109. Consequently, the Company continues to apply hedge accounting on and after the date of transition toInd AS.

4. In accordance with exemption given in Ind AS 101, the Company has recorded investments in subsidiaries at deemed costi.e previous GAAP carrying amount on transition date.

(c) Reconciliations:

The following reconciliations provide a quantification of the effect of significant differences arising from the transition fromIndian GAAP to Ind AS in accordance with Ind AS 101:

Equity as at April 1, 2016;

Equity as at March 31, 2017;

Total comprehensive income for the year ended March 31, 2017;

i) Equity reconciliation

Particulars NotesAs At

March 31, 2017 April 1, 2016Equity under previous GAAP 23,164 19,789

Fair Valuation of Mutual Funds 1 372 24

Employee Benefit Expenses 297 180

Taxes (800) (384)

Others (33) 87

Equity as per Ind AS 23,000 19,696


139Mastek Limited


ii) Total comprehensive income reconciliation

Particulars NotesAs At

March 31, 2017

Net Profit as per Previous GAAP 2,526

Fair value of investment designated at FVTPL 1 13

Employee Benefit Expenses (84)

Revenue recognition - multiple element accounting (88)

Others (55)

Net profit for the period as per IND AS 2,312

Other Comprehensive Income 790

Total Comprehensive Income 3,102

Notes

1. Fair valuation of investments:

a) Under Ind AS, financial assets and financial liabilities designated at fair value through profit and loss (FVTPL) are fairvalued at each reporting date with changes in fair value recognized in the statement of profit and loss. Under previousGAAP, they are measured at lower of cost or net realisable value. Some mutual fund Liquid fund investments have beenclassified as FVTPL based on business model of the company. Consequently, increase in fair value of such investmentsin quoted mutual funds has resulted in a gain.

b) Under Ind AS, financial assets designated at fair value through other comprehensive income (FVTOCI) are fair valuedat each reporting date with changes in fair value (net of deferred taxes) recognized directly in other comprehensiveincome. Under previous GAAP, they are measured at cost with provision for diminution other than temporary.

2. Under previous GAAP, actuarial gains and losses were recognised in the statement profit and loss. Under Ind AS, theactuarial gains and losses form part of remeasurement of the net defined benefit liability / asset which is recognised in othercomprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive incomeunder Ind AS instead of statement of profit and loss.

3. Under the Previous GAAP, the Company was not required to present other comprehensive income (OCI) separately. As perInd AS 1, Presentation of Financial Statements, Ind AS 19, Employee Benefits and Ind AS 109, actuarial gain / loss on definedbenefit liability, effective portion of cash flow hedges reserve has been shown separately and gain/loss on other financialassets measured through OCI.

4. The Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating,investingand financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended 31st March,2017 as compared with the previous GAAP.



33 EMPLOYEE STOCK BASED COMPENSATION

i) Plan IV

The Shareholders of the Company through Postal Ballot on August 9, 2007 approved the allocation of 1,000,000 stock options to the eligible employees of the Company and its subsidiaries. The Company subsequently established a new scheme in 2007 for granting 1,000,000 stock options to the employees referred to above, each option representing one equity share of the Company. The vesting period of stock options will range from one year to four years from the date of grant. The stock options are exercisable within a period of seven years from the date of vesting.

Particulars

Year Ended

March 31, 2018 March 31, 2017

No. of share options

Weighted average

Exercise price


Weighted average Exercise

price

Outstanding options at beginning of the year 1,47,927 99 2,76,117 105

Granted during the year - - - -

Exercised during the year (15,894) 116 (7,247) 113

Lapsed/Cancelled during the year (86,382) 97 (1,20,943) 113

Outstanding options, end of the year 45,651 97 1,47,927 99

Options exercisable, end of the year 45,651 97 1,47,927 99

ii) Plan V

The Company introduced a new scheme in 2008 for granting 1,500,000 stock options to the employees, each option representing one equity share of the Company. The vesting period of stock options will range from one year to four years from the date of grant. The stock options are exercisable within a period of seven years from the date of vesting.

Particulars

Year Ended

March 31, 2018 March 31, 2017


Weighted average

Exercise price



price

Outstanding options at beginning of the year 62,225 68 1,43,825 65



Lapsed/Cancelled during the year - - (2,500) 47

Cancelled revoked during the year 2,500 47 - -

Outstanding options, end of the year 54,725 71 62,225 68

Options exercisable, end of the year 54,725 71 62,225 68


141Mastek Limited


iii) Plan VI


Particulars

Year Ended

March 31, 2018 March 31, 2017


Weighted average

Exercise price



price



Exercised during the year (1,92,744) 62 (1,89,869) 48

Lapsed/Cancelled during the year (29,875) 175 (1,28,783) 139

Outstanding options, end of the year 8,01,041 80 10,23,660 79

Options exercisable, end of the year 6,49,506 66 5,90,631 60

iv) Plan VII

The Company introduced a new scheme in 2013 for granting 2,500,000 stock options to its employees, employees of its subsidiaries and its Independent Directors, each option giving a right to apply for one equity share of the Company on its vesting. The vesting period of stock option will range from one year to four years from the date of grant. The stock options are exercisable within a period of seven years from the date of vesting.

Particulars

Year Ended

March 31, 2018 March 31, 2017


Weighted average

Exercise price



price


Granted during the year 6,65,825 218 3,20,000 169

Exercised during the year (95,885) 100 (1,04,043) 62

Lapsed/Cancelled during the year (2,40,199) 294 (99,850) 84

Outstanding options, end of the year 14,23,221 133 10,93,480 114

Options exercisable, end of the year 4,91,232 94 2,89,384 82



The following tables summarize information about the options/ shares outstanding under various programs as at March 31, 2018, March 31, 2017 and April 1, 2016 respectively:


Particulars No. of share options

Weighted average remaining contractual

life in years

Weighted average exercise

price

Programme IV 45,651 0.5 97

Programme V 54,725 2.3 71

Programme VI 8,01,041 5.2 80

Programme VII 14,23,221 7.4 133




life in years

Weighted average exercise price

Programme IV 1,47,927 0.7 99


Programme VI 10,23,660 6.4 79

Programme VII 10,93,480 7.7 114

As at April 1, 2016



life in years


Programme IV 2,76,117 3.5 105

Programme V 1,43,825 4.5 65

Programme VI 13,42,312 7.2 81

Programme VII 9,77,373 6.7 87

The weighted average fair value of each unit under the plan, granted during the year ended was ` 257 using the Black-Scholes model with the following assumptions:

ParticularsAs at

March 31, 2018

Weighted average grant date share price 349.8

Weighted average exercise price 217.5

Dividend yield % 1.72%

Expected life 4-7

Risk free interest rate 6.80%

Volatility 67.80%


143Mastek Limited


34 LEASES

1. Operating Lease

i) Lease payment

Particulars As at


Future minimum lease payment under non-cancellable operating lease (in respect of properties):

Due within one year - - 56

Due later than one year but not later than five years - - 59

Due later than five years - - -

Total Minimum lease payment - - 114

ii) Lease income

Particulars As at


Future minimum lease income under non-cancellable operating lease (in respect of properties):

Due within one year 44 234 168

Due later than one year but not later than five years - 39 196

44 273 364

2. Finance Lease

Particulars As at


Total minimum finance lease payment outstanding

Due within one year - 30 36

Due later than one year but not later than five years - 26 20

Total minimum lease payments - 56 56

Less: interest not due - (8) (8)

Present value of net minimum lease payments - 48 48

35 MICRO, SMALL AND MEDIUM ENTERPRISES

Disclosure of payable to vendors as defined under the “Micro, Small and Medium Enterprise Development Act, 2006” is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payments made during the year or on balance brought forward from previous year.



36 CAPITAL COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2018 is `130 (March 31, 2017: `133 and April 1, 2016: `295)

37 CONTINGENT LIABILITIES

ParticularsAs at

March 31, 2018 March 31, 2017

Claims against Company not acknowledged as debts

(a) Sales tax matter 362 238

(b) Stamp duty matter - -

(c) Income tax matter - 854 (i) The Company does not expect any cash outflows or any reimbursements in

respect of the above contingent liabilities.(ii) It is not practicable for the Company to estimate the timing of cash outflows, if

any, in respect of the above, pending occurrence of the default event or resolutionof respective proceedings.

38 PAYMENT TO THE AUDITOR


March 31, 2018 March 31, 2017

Statutory Audit Fees 34 40

Other Expenses 13 27

Total 47 67

39 EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILITIES


March 31, 2018 March 31, 2017

Amount required to be spent as per Section 135 of the Companies Act 84 97

Amount spent during the year 84 130








145Mastek Limited


Independent Auditor’s Report To the Members of Mastek Limited

Report on the Consolidated Financial Statements

1. We have audited the accompanying consolidated financialstatements of Mastek Limited (‘the Holding Company’) andits subsidiaries (the Holding Company and its subsidiariestogether referred to as ‘the Group’), which comprise theConsolidated Balance Sheet as at 31 March 2018, theConsolidated Statement of Profit and Loss (including OtherComprehensive loss), the Consolidated Cash Flow Statement and the Consolidated Statement of Changes in Equity forthe year then ended, and a summary of the significantaccounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

2. The Holding Company’s Board of Directors is responsible forthe preparation of these consolidated financial statementsin terms of the requirements of the Companies Act, 2013(‘the Act’) that give a true and fair view of the consolidatedstate of affairs (consolidated financial position), consolidated profit or loss (consolidated financial performance includingother comprehensive loss), consolidated cash flows andconsolidated changes in equity of the Group, in accordancewith the accounting principles generally accepted inIndia, including the Indian Accounting Standards (IndAS) specified under Section 133 of the Act. The HoldingCompany’s Board of Directors and the respective Board ofDirectors/management of the subsidiaries included in theGroup, are responsible for the design, implementation andmaintenance of internal control relevant to the preparationand presentation of the financial statements that give atrue and fair view and are free from material misstatement,whether due to fraud or error. Further, in terms of theprovisions of the Act, the respective Board of Directors/management of the companies included in the Group,covered under the Act, are responsible for maintenanceof adequate accounting records, in accordance with theprovisions of the Act for safeguarding the assets and forpreventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design, implementation and maintenance ofadequate internal financial controls, that were operatingeffectively for ensuring the accuracy and completeness ofthe accounting records, relevant to the preparation andpresentation of the financial statements that give a trueand fair view and are free from material misstatement,whether due to fraud or error. These financial statementshave been used for the purpose of preparation of theconsolidated financial statements by the Directors of theHolding Company, as aforesaid.


3. Our responsibility is to express an opinion on theseconsolidated financial statements based on our audit.

4. While conducting the audit, we have taken into accountthe provisions of the Act, the accounting and auditingstandards and matters which are required to be includedin the audit report under the provisions of the Act and theRules made thereunder.

5. We conducted our audit in accordance with the Standardson Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtainreasonable assurance about whether these consolidatedfinancial statements are free from material misstatement.

6. An audit involves performing procedures to obtain auditevidence about the amounts and the disclosures inthe consolidated financial statements. The proceduresselected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of theconsolidated financial statements, whether due to fraudor error. In making those risk assessments, the auditorconsiders internal financial controls relevant to the HoldingCompany’s preparation of the consolidated financialstatements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness ofthe accounting estimates made by the Holding Company’sBoard of Directors, as well as evaluating the overallpresentation of the consolidated financial statements.

7. We believe that the audit evidence obtained by us issufficient and appropriate to provide a basis for our auditopinion on these consolidated financial statements.

Opinion

8. In our opinion and to the best of our information andaccording to the explanations given to us, the aforesaidconsolidated financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India, of the consolidated state ofaffairs (consolidated financial position) of the Group, as at31 March 2018, and their consolidated profit (consolidatedfinancial performance including other comprehensive loss),their consolidated cash flows and consolidated changes inequity for the year ended on that date.




Other Matter

9. The comparative financial information for the year ended31 March 2017 and the transition date opening balancesheet as at 1 April 2016, prepared in accordance with IndAS and included in these consolidated financial statements,are based on the previously issued statutory consolidatedfinancial statements for the year ended 31 March 2017 and31 March 2016, respectively, prepared in accordance withAccounting Standards prescribed under Section 133 of theAct, read with Rule 7 of the Companies (Accounts) Rules,2014 (as amended), which were audited by the predecessorauditor whose reports dated 20 April 2017 and 19 April2016, respectively, expressed unmodified opinion on thoseconsolidated financial statements, and have been adjustedfor the differences in the accounting principles adopted bythe Group on transition to Ind AS, which have been auditedby us. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by Section 143(3) of the Act, based on ouraudit on separate financial statements and other financialinformation of the subsidiaries, we report, to the extentapplicable, that:

a) We have sought and obtained all the information andexplanations which to the best of our knowledge andbelief were necessary for the purpose of our audit ofthe aforesaid consolidated financial statements;

b) In our opinion, proper books of account as requiredby law relating to preparation of the aforesaidconsolidated financial statements have been kept sofar as it appears from our examination of those booksand the reports of the other auditors,

c) The consolidated financial statements dealt with bythis report are in agreement with the relevant booksof account maintained for the purpose of preparationof the consolidated financial statements;

d) in our opinion, the aforesaid consolidated financialstatements comply with Ind AS specified under Section 133 of the Act;

e) On the basis of the written representations receivedfrom the directors of the Holding Company andtaken on record by the Board of Directors of theHolding Company, none of the directors of the Groupcompanies covered under the Act, are disqualifiedas on 31 March 2018 from being appointed as adirector in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financialcontrols over financial reporting of the HoldingCompany, and its subsidiary companies coveredunder the Act and the operating effectiveness of suchcontrols, refer to our separate report in ‘Annexure A’;

g) With respect to the other matters to be included inthe Auditor’s Report in accordance with Rule 11 ofthe Companies (Audit and Auditor’s) Rules, 2014(as amended), in our opinion and to the best of ourinformation and according to the explanations givento us and based on the consideration of the reports ofthe other auditors on separate financial statements, asalso the other financial information of the subsidiaries:

(i) The consolidated financial statements disclosethe impact of pending litigations on theconsolidated financial position of the Group asdetailed in Note 37 to the consolidated financialstatements.

(ii) provision has been made in the consolidatedfinancial statements, as required under theapplicable law or Ind AS, for material foreseeablelosses, if any, on long-term contracts, includingderivative contracts, as detailed in Note 30 to theconsolidated financial statements;

(iii) There has been no delay in transferring amounts,required to be transferred to the InvestorEducation and Protection Fund by the HoldingCompany, and its subsidiary companies coveredunder the Act;

(iv) the disclosure requirements relating to holdingsas well as dealings in specified bank notes wereapplicable for the period from 8 November 2016to 30 December 2016 which are not relevant tothese consolidated financial statements. Hence,reporting under this clause is not applicable.




147Mastek Limited

Annexure Ato the Independent Auditor’s Report of even date to the members of Mastek Limited on the consolidated financial statements for the year ended 31 March 2018.

Independent Auditor’s Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’).

1. In conjunction with our audit of the consolidated financialstatements of Mastek Limited (‘the Holding Company’) andits subsidiaries (the Holding Company and its subsidiariestogether referred to as ‘the Group’), as at and for theyear ended 31 March 2018, we have audited the internalfinancial controls over financial reporting (‘IFCoFR’) of theHolding Company, its one subsidiary company, which arecompanies covered under the Act, as at that date.

Management’s Responsibility for Internal Financial Controls

2. The respective Board of Directors of the Holding Companyand its one subsidiary company, which are companiescovered under the Act, are responsible for establishingand maintaining internal financial controls based onthe criteria established by the Company considering theessential components of internal control stated in theGuidance Note on Audit of Internal Financial Controlsover Financial Reporting (“Guidance Note”) issued bythe Institute of Chartered Accountants of India (“ICAI”).These responsibilities include the design, implementationand maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderlyand efficient conduct of the company’s business, includingadherence to the company’s policies, the safeguarding of itsassets, the prevention and detection of frauds and errors,the accuracy and completeness of the accounting records,and the timely preparation of reliable financial information,as required under the Act.


3. Our responsibility is to express an opinion on the IFCoFRof the Holding Company and its one subsidiary company,as aforesaid, based on our audit. We conducted our auditin accordance with the Standards on Auditing issued bythe Institute of Chartered Accountants of India (‘ICAI’) anddeemed to be prescribed under Section 143(10) of the Act,to the extent applicable to an audit of IFCoFR, and theGuidance Note on Audit of Internal Financial Controls Over

Financial Reporting (‘the Guidance Note’) issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain auditevidence about the adequacy of the IFCoFR and theiroperating effectiveness. Our audit of IFCoFR includesobtaining an understanding of IFCoFR, assessing the riskthat a material weakness exists, and testing and evaluatingthe design and operating effectiveness of internal controlbased on the assessed risk. The procedures selected dependon the auditor’s judgement, including the assessment of therisks of material misstatement of the financial statements,whether due to fraud or error.

5. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our auditopinion on the IFCoFR of the Holding Company and its onesubsidiary company, as aforesaid.

Meaning of Internal Financial Controls over Financial Reporting

6. A company’s IFCoFR is a process designed to providereasonable assurance regarding the reliability of financialreporting and the preparation of financial statements forexternal purposes in accordance with generally acceptedaccounting principles. A company’s IFCoFR include thosepolicies and procedures that (1) pertain to the maintenanceof records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally acceptedaccounting principles, and that receipts and expendituresof the company are being made only in accordance withauthorisations of management and directors of thecompany; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition,use, or disposition of the company’s assets that could havea material effect on the financial statements.



Annexure A to the Independent Auditor’s Report of even date to the members of Mastek Limited on the consolidated financial statements for the year ended 31 March 2018.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of IFCoFR, including thepossibility of collusion or improper management overrideof controls, material misstatements due to error or fraudmay occur and not be detected. Also, projections of anyevaluation of the IFCoFR to future periods are subject tothe risk that the IFCoFR may become inadequate becauseof changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Holding Company and its onesubsidiary company, which are companies covered underthe Act, have in all material respects, adequate internal

financial controls over financial reporting and such controls were operating effectively as at 31 March 2018, based on internal control over financial reporting criteria established by the respective companies considering the essential components of internal control stated in the Guidance Note issued by the ICAI.




149Mastek Limited

See accompanying notes to the consolidated financial statements

As per our report of even date attached For and on behalf of the Board of Directors of Mastek LimitedFor Walker Chandiok & Co LLP Chartered Accountants Firm Registration No: 001076N/N500013





(` in lakhs)

Note As at

March 31, 2018 March 31, 2017 April 1, 2016ASSETSNon-current assetsProperty plant & equipment,net 3(a) 4,589 4,331 4,352 Capital work-in-progress 208 22 14 Goodwill 3(c) 10,803 10,536 1,890 Other intangible assets,net 3(b) 2,494 3,111 333 Financial assets

Investments 4(a) 16,637 16,882 20,356 Loans 4(b) 201 176 102 Other non-current financial assets 4(c) - 283 258

Non-current tax assets 839 2,087 2,287 Deferred tax assets, net 24(c) 5,304 3,648 3,916 Other non-current assets 5 86 72 132 Total non-current assets 41,161 41,148 33,640 Current assetsFinancial Assets

Investments 6(a) 11,770 10,502 3,138 Trade receivables 6(b) 13,514 8,509 9,713 Cash and Cash equivalents 6(c) 8,773 4,772 6,723 Bank balances, other than cash & cash equivalent 6(c) 29 25 2,134 Loans 6(d) 44 12 24 Other current financial assets 6(e) 7,670 7,383 4,587

Other current assets 7 1,037 794 1,439 Total current assets 42,837 31,997 27,758 Total Assets 83,998 73,145 61,398 EQUITY AND LIABILITIESEquityEquity Share capital 8 1,185 1,169 1,150 Other Equity 9 53,743 45,737 46,436 Total Equity 54,928 46,906 47,586 Non-current liabilitiesFinancial liabilities

Borrowings 10(a) 4,961 6,523 18 Other non-current financial liabilities 10(b) 2,653 3,838 279 Deferred tax liabilities, net 24(c) 1,865 2,654 2,279 Provisions 11 664 967 550 Total non-current liabilities 10,143 13,982 3,126 Current liabilitiesFinancial liabilities

Borrowings 12(a) 391 2 - Trade payables 12(b) 1,889 1,989 949 Other current financial liabilities 12(c) 10,929 6,310 4,254

Other current liabilities 13 4,359 3,214 4,883 Provisions 14 474 328 600 Current tax liability (net) 885 414 - Total current liabilities 18,927 12,257 10,686 Total Equity & liabilities 83,998 73,145 61,398

Consolidated Balance SheetAs at March 31, 2018



(` in lakhs, except per share data)

NoteYear ended

March 31, 2018 March 31, 2017INCOMERevenue from operations 15 81,721 56,016 Other income 16 2,099 1,260 Total Income 83,820 57,276

EXPENSESEmployee benefits expenses 17 48,094 32,324 Finance costs 18 586 377 Depreciation and amortization expenses 19 1,876 1,493 Other expenses 20 23,661 18,836 Total expenses 74,217 53,030 Profit before exceptional item and tax 9,603 4,246 Exceptional items - loss 21 - (340)Profit before tax 9,603 3,906 Tax expenseCurrent tax 24(a) 2,426 1,281 Deferred tax (benefit) expense (118) 287 Income tax charge / (write back) for earlier years 299 (903)Total tax expense 2,607 665 Profit after tax for the year 6,996 3,241 Other comprehensive income (OCI), net of taxesItems that will not be reclassified subsequently to the statement of profit or loss:Defined benefit plan actuarial gains/ (losses) 375 0 Net change in fair value of financial instruments through OCI (2,426) (397)Income tax relating to items that will not be reclassified to profit and loss 122 0 Items that will be reclassified subsequently to the statement of profit or loss:Foreign currency translation differences 3,503 (4,549)Net change in fair value of forward contracts designated as cash flow hedges (2,696) 852 Net change in fair value of financial instruments 292 334 Income tax relating to items that will be reclassified to profit and loss (826) 397 Total other comprehensive loss for the year, net of taxes (248) (4,157)Total comprehensive income / (loss) for the year 6,748 (916)

Earning per equity share 22(Equity shares of par value ` 5/- each)Basic 29.74 13.96 Diluted 28.14 13.38

See accompanying notes to the consolidated financial statements






Consolidated Statement of Profit and LossFor the year ended March 31, 2018

151Mastek Limited

(` in lakhs)Year ended

March 31, 2018 March 31, 2017Cash flows from operating activitiesProfit for the year 6,996 3,241 Adjustments:

Interest income (152) (252)Employee stock compensation expenses 395 228 Finance costs 586 377 Depreciation and amortisation 1,876 1,493 Tax Expense 2,607 665 Dividend Income from current investment (6)Provision / (Reversal) for doubtful debts and loans and advances, net 88 136 Bad debts written off 16 10 Loss / (Profit) on sale of property plant and equipment, net 1 (4)Profit on sale of current investments (340) (305)Rental income (253) (256)

Changes in operating assets and liabilities; net of effects from acquisitions 11,814 5,333 Decrease / (Increase) in trade receivables (3,800) 3,562 (Increase) / Decrease in loans and advances and other assets (2,009) (1,955)(Decrease)/increase in trade payables, other liabilities and provisions 1,330 (2,285)

Cash generated from operating activities before taxes 7,335 4,655 Income taxes refunds (paid), net (925) (370)

Net cash generated from operating activities 6,410 4,285 Cash flows from investing activities

Proceeds from sale of property, plant and equipment 6 29 Purchase of property, plant and equipment and software (1,544) (1,258)Interest received 109 391 Rental income 243 248 Earnout payment on account of Business Combination (552) (193)Dividend Income from current investment 6 - Realisation in bank deposits having original maturity over three months - 2,095 Purchase of equity share warrants - (1)Purchase consideration paid for acquisition of subsidiary, net of cash - (6,487)Purchase of current investments (11,305) (25,825)Proceeds from current investments 10,668 19,100

Net cash (used in) / generated from investing activities (2,369) (11,901)Cash flows from financing activities

Proceeds from issue of shares under the employee stock option schemes 243 213 Proceeds / (Repayment) of borrowings 390 6,722 Proceeds / (Repayment) of finance Leases 25 15 Dividends paid including dividend distribution tax (1,069) (233)Interest paid on loans and on finance lease (272) (258)

Net cash generated from / (used in) financing activities (683) 6,459 Effect of changes in exchange rates for cash and cash equivalents 643 (794)Net increase/(decrease) in cash and cash equivalents during the year 4,001 (1,951)Cash and cash equivalents at the beginning of the year 4,772 6,723 Cash and cash equivalents at the end of the year 8,773 4,772

Consolidated Cash Flow StatementFor the year ended March 31, 2018

The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Ind AS - 7 on Statement of Cash Flow issued by The Institute of Chartered Accountants of India








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153Mastek Limited

Significant accounting policies and notes to accountsFor the year ended March 31, 2018(` in lakhs, except share and per share data, unless otherwise stated)

1. COMPANY OVERVIEW

Mastek Limited (the ‘Company’) is a public limited companydomiciled in India and is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).The Company andits subsidiaries (collectively referred hereinunder as ”theGroup”) and a joint venture are providers of vertically-focused enterprise technology solutions.

The Group’s offering portfolio includes business and technology services comprising of Application Development, Application Maintenance, Business Intelligence and Data Warehousing, Testing & Assurance, Digital Commerce, Agile Consulting and Legacy Modernisation. The Group carries out its operations in UK, USA and India and has its offshore software development centres in India at Mumbai, Delhi, Gurugram, Noida, Pune, Chennai and Mahape.

The details of subsidiaries including step-down subsidiaries and joint venture considered in these consolidated financial statements are:

Name of the CompanyCountry of

Incorporation

% of voting power held as at March 31, 2018

% of voting power held as at March

31, 2017

% of voting power held as at

April 1, 2016Mastek (UK) Limited UK 100% 100% 100%IndigoBlue Consulting Limited UK 100% 100% 100%Digility Inc. ** USA 100% 100% 100%

Trans American Information Systems Private Limited ^^ India 100% 100% -Trans American Information Systems Inc. @ USA 100% 100% -Taistech LLC @ USA 100% 100% -Legal Practice Technologies Limited @@ UK - - 40%

**Incorporated with effect from November 17, 2015 ^^ Acquired with effect from December 23, 2016 @ Acquired with effect from December 23, 2016 @@ Dissolved with effect from December 6, 2016

2. BASIS OF PREPARATION AND PRESENTATION

(a) Statement of Compliance

These consolidated financial statements have beenprepared in accordance with Indian AccountingStandards (“Ind AS”) notified under the Companies(Indian Accounting Standards) Rules, 2015 andCompanies (Indian Accounting Standards) AmendmentRules, 2016, as applicable. For all the periods upto theyear ended March 31, 2017, the Group had earlierprepared and presented its financial statements inaccordance with accounting standards notified undersection 133 of the Companies Act 2013 (Indian GAAP).These consolidated financial statements for the yearended 31st March, 2018 are the first financial withcomparatives, prepared under Ind AS. The adoption wascarried out in accordance with Ind AS 101, First Timeadoption of Indian Accounting Standards. The transitionwas carried out from Indian Accounting Principlegenerally accepted in India as prescribed under Section133 of the Act read with the Rule 7 of the Companies(Accounts) Rules, 2014 (Indian GAAP), which was theprevious GAAP. Reconciliations and description of theeffect of the transition to Ind AS from Indian GAAP isgiven in Note 33.

These consolidated financial statement of the Group as at and for the year ended 31st March 2018 (including Comparatives) were approved and authorized by the Company’s board of directors as on 18th April 2018.

All amounts included in the consolidated financial statements are reported in Indian rupees (in lakhs) except share and per share data unless otherwise stated and “0” denotes amounts less than one lakh rupees.

(b) Basis of Preparation

The consolidated financial statements have beenprepared on a historical cost convention and on anaccrual basis, except for the following material itemsthat have been measured at fair value as required byrelevant Ind AS:

i) Derivative financial instruments;

ii) Certain financial assets and liabilities measuredat fair value (refer accounting policy on financialinstruments);

iii) Share based payment transactions;

iv) Defined benefit and other long-term employeebenefits and

v) Contingent Consideration




(c) Use of estimate and judgement

The preparation of consolidated financial statementsin conformity with Ind AS requires management tomake judgments, estimates and assumptions thataffect the application of accounting policies andthe reported amounts of assets, liabilities, incomeand expenses. Actual results may differ from theseestimates. Estimates and underlying assumptions arereviewed on a periodic basis. Revisions to accountingestimates are recognized in the period in whichthe estimates are revised and in any future periodsaffected. In particular, information about significantareas of estimation, uncertainty and critical judgmentsin applying accounting policies that have the mostsignificant effect on the amounts recognized in theconsolidated financial statements is included in thefollowing notes:

i) Revenue Recognition: The Group applies thepercentage of completion method in accountingfor its fixed price contracts. Use of the percentage of completion method requires the Company toestimate the efforts or costs expended to dateas a proportion of the total efforts or costs to beexpended. Efforts or costs expended have beenused to measure progress towards completion asthere is a direct relationship between input andproductivity. Provisions for estimated losses, ifany, on uncompleted contracts are recorded inthe period in which such losses become probablebased on the expected contract estimates at thereporting date.

ii) Income taxes: The Group’s three major taxjurisdictions are India, UK and the U.S. Significantjudgments are involved in determining theprovision for income taxes, including the amountexpected to be paid or recovered in connectionwith uncertain tax positions.

iii) Business combination: Business combinationsare accounted for using Ind AS 103. Ind AS 103requires the identifiable intangible assets andcontingent consideration to be fair valued inorder to ascertain the net fair value of identifiableassets, liabilities and contingent liabilities of theacquiree. Significant estimates are required tobe made in determining the value of contingentconsideration and intangible assets and theirestimated useful life. These valuations areconducted by independent valuation experts.

iv) Defined benefit plans and compensatedabsences: The cost of the defined benefit plans,compensated absences and the present valueof the defined benefit obligations are basedon actuarial valuation using the projected unitcredit method. An actuarial valuation involvesmaking various assumptions that may differ fromactual developments in the future. These includethe determination of the discount rate, futuresalary increases and mortality rates. Due to thecomplexities involved in the valuation and itslong-term nature, a defined benefit obligation ishighly sensitive to changes in these assumptions.All assumptions are reviewed at eachreporting date.

v) Property, plant & equipment: Property, plantand equipment represent a significant proportionof the asset base of the Company. The changein respect of periodic depreciation is derivedafter determining an estimate of an assetsexpected useful life and the expected residualvalue at the end of its life. The useful lives andresidual values of the Company’s are determinedby the management at the time the asset isacquired and reviewed periodically, including ateach financial year end. The lives are based onhistorical experience with similar assets as well asanticipation of future events, which may impacttheir life, such as changes in technology

vi) Impairment testing: Goodwill and Intangibleassets recognized on business combinationare tested for impairment at least annually orwhen events occur or changes in circumstancesindicate that the recoverable amount of theasset or the cash generating unit (CGU) to whichthese pertain is less than the carrying value. Therecoverable amount of the asset or the cashgenerating units is higher of value-in-use andfair value less cost of disposal. The calculation ofvalue in use of a cash generating unit involves use of significant estimates and assumptions whichincludes turnover and earnings multiples, growthrates and net margins used to calculate projectedfuture cash flows, risk-adjusted discount rate,future economic and market conditions.

vii) Expected credit losses on financial assets:On application of Ind AS 109, the impairmentprovisions of financial assets are based on

155Mastek Limited

assumptions about risk of default and expected timing of collection. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history of collections, customer’s credit-worthiness, existing market conditions as well as forward looking estimates at the end of each reporting period.

viii) Research & Development Credit: Researchand Development credit, in accordance with IndAS 20 are recognised only to the extent there isreasonable assurance that the related conditionswill be met and amounts will be received.

ix) Deferred taxes: Deferred tax is recorded ontemporary differences between the tax bases ofassets and liabilities and their carrying amounts, at the rates that have been enacted or substantivelyenacted at the reporting date. The ultimaterealization of deferred tax assets is dependentupon the generation of future taxable profitsduring the periods in which those temporarydifferences and tax loss carry forwards becomedeductible. The Company considers the expectedreversal of deferred tax liabilities and projectedfuture taxable income in making this assessment.The amount of the deferred tax assets consideredrealizable, however, could be reduced in the nearterm if estimates of future taxable income duringthe carry-forward period are reduced.

x) Provisions: Provision is recognised when theGroup has a present obligation as a result ofpast event and it is probable that an outflow ofresources will be required to settle the obligation,in respect of which a reliable estimate can bemade. Provisions (excluding retirement obligation and compensated expenses) are not discountedto its present value and are determined based onbest estimate required to settle obligation at thebalance sheet date. These are reviewed at eachbalance sheet date adjusted to reflect the currentbest estimates.

xi) Share-based payments: The Grant datefair value of options granted to employeesis recognized as employee expense, withcorresponding increase in equity, over the period

that the employee become unconditionally entitled to the option. The increase in equity recognized in connection with share based payment transaction is presented as a separate component in equity under “share option outstanding account”. The amount recognized as expense is adjusted to reflect the impact of the revision estimates based on number of options that are expected to vests, in the statement of profit and loss with a corresponding adjustment to equity.

(d) Basis of Consolidation

The consolidated financial statements incorporatethe financial statements of the Company andentities controlled by the Company (its subsidiaries).Control exists when the parent has power over aninvestee, exposure or rights to variable returns fromits involvement with the investee and ability to use itspower to affect those returns. Power is demonstratedthrough existing rights that give the ability to directrelevant activities, those which significantly affect theentity’s returns. Subsidiaries are consolidated from thedate control commences until the date control ceases.The financial statements of subsidiaries areconsolidated on a line-by-line basis and intra-groupbalances and transactions including unrealised gain/loss from such transactions are eliminated uponconsolidation. The financial statements are preparedby applying uniform policies in use at the Group.

(e) Summary of Significant accounting policies

i) Functional and Presentation Currency

Items included in the consolidated financialstatements of each of the Group’s subsidiariesare measured using the currency of the primaryeconomic environment in which these entitiesoperate (i.e. the “functional currency”). Theconsolidated financial statements are presentedin Indian Rupee, the national currency of India,which is the functional currency of the Company.

ii) Foreign currency transactions and balances

Transactions in foreign currency are translatedinto the respective functional currencies usingthe exchange rates prevailing at the dates ofthe respective transactions. Foreign exchangegains and losses resulting from the settlementof such transactions and from the translation at




the exchange rates prevailing at reporting date of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statement of profit and loss and reported within foreign exchange gains/ (losses

Non-monetary assets and liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.

For the purposes of presenting the consolidated financial statements assets and liabilities of Group’s foreign operations with functional currency different from the Company are translated into Company’s functional currency i.e. INR using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any are recognised in other comprehensive income and accumulated in equity.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the exchange rate in effect at the balance sheet date.

iii) Financial instruments

A. Initial Recognition and Measurement

The Company recognizes financial assetsand liabilities when it becomes a party to thecontractual provisions of the instrument. Allfinancial assets and liabilities are recognizedat fair value on initial recognition, except fortrade receivables which are initially measuredat transaction price. Transaction costs that aredirectly attributable to the acquisition or issueof financial assets and liabilities that are not atfair value through profit or loss are added to thefair value on initial recognition. Regular purchaseand sale of financial assets are recognised on thetrade date.

B. Subsequent Measurement

1. Non-Derivative Financial Instruments

a) Financial Assets Carried at Amortised Cost

A financial asset is subsequently measured atamortised cost if it is held within a business

model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

b) Financial Assets at Fair Value Through OtherComprehensive Income (FVTOCI)

A financial asset is subsequently measuredat fair value through other comprehensiveincome if it is held within a business modelwhose objective is achieved by both collectingcontractual cash flows and selling financialassets and the contractual terms of the financialasset give rise on specified dates to cash flowsthat are solely payments of principal andinterest on the principal amount outstanding.Further in cases where the Company has madean irrevocable election based on its businessmodel, for its investment which are classified asequity instruments, the subsequent changes infair value are recognised in OCI.

c) Financial Assets at Fair Value Through Profit orLoss (FVTPL)

A financial asset which is not classified in any ofthe above categories are subsequently fair valuedthrough profit or loss.

d) Financial Liabilities

Financial liabilities are subsequently carried atamortized cost using the effective interest method, except for contingent consideration recognizedin a business combination which is subsequentlymeasured at fair value through profit and loss.For trade and other payables maturing within oneyear from the Balance Sheet date, the carryingamounts approximate fair value due to the shortmaturity of these instruments.

e) Derivative Financial Instruments

The Company holds derivative financialinstruments such as foreign exchange forward tomitigate the risk of changes in exchange rates onforeign currency exposures. The counterparty forthese contracts is generally a bank. Derivativesare recognized and measured at fair value.

Cash flow hedges: Changes in the fair value ofthe derivative hedging instrument designatedas a cash flow hedge are recognized in other


157Mastek Limited

comprehensive income and presented within equity in the cash flow hedging reserve to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognized in the consolidated statement of profit and loss.

C. Derecognition of Financial Instruments

The Company derecognises a financial assetwhen the contractual right to receive the cashflows from the financial asset expire or it transfers the financial asset.

A financial liability is derecognised when theobligation under the liability is discharged,cancelled or expires.

iv) Current Versus Non-Current Classification

i) An asset is considered as current when it is:

a) Expected to be realized or intended to be soldor consumed in normal operating cycle


c) Expected to be realised within twelvemonths after the reporting period, or

d) Cash or cash equivalent unless restrictedfrom being exchanged or used to settle aliability for at least twelve months after thereporting period.

ii) All other assets are classified as non-current.

iii) liability is considered as current when it is:

a) Expected to be settled in normal operating cycle


c) Due to be settled within twelve monthsafter the reporting period, or

d) There is no unconditional right to defer thesettlement of the liability for at least twelvemonths after the reporting period.

iv) All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified asnon-current assets and liabilities

v) Property, Plant & Equipment

Property, plant and equipment are statedat cost, less accumulated depreciation andimpairment, if any. Costs directly attributable

to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by management. The cost of property, plant and equipment acquired in a business combination is recorded at fair value on the date of acquisition

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the Statement of Profit or Loss when the asset is derecognised.

For transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant and equipment recognised as on April 1, 2016 measured as per previous GAAP as it deemed cost on the date of transition.

The Company depreciates property, plant and equipment over their estimated useful lives using the straight-line method. The estimated useful lives of assets are as follows:


Building 25 - 30 years

Computers 2-4 years

Plant and Machinery 2 - 5 years

Furniture and fixtures 5 years

Office Equipment 5 years

Vehicles 2 - 5 years

Leasehold Improvements 5 -15 years or the primary period of lease whichever is less

Leasehold land Lease Term ranging from 95-99 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

vi) Intangible assets

Intangible assets acquired separately aremeasured at cost of acquisition. Intangible assetsacquired in a business combination are measuredat fair value as at the date of acquisition.Following initial recognition, intangible assetsare carried at cost less accumulated amortizationand impairment losses, if any.




The amortization of an intangible asset with a finite useful life reflects the manner in which the economic benefit is expected to be generated.

The estimated useful life of amortizable intangibles are reviewed and where appropriate are adjusted, annually.

The estimated useful lives of the amortizable intangible assets for the current and comparative periods are as follows:


Computer Software 1 - 5 years

Customer Contracts 1 Year

Customer Relationships 10-15 Years

vii) Business combination

Business combinations are accounted for usingthe acquisition method under the provisions ofInd AS 103, Business Combinations. The costof an acquisition is measured at the fair valueof the assets transferred, equity instrumentsissued and liabilities incurred or assumed at thedate of acquisition, which is the date on whichcontrol is transferred to the Company. Thecost of acquisition also includes the fair valueof any contingent consideration. Identifiableassets acquired, liabilities and contingentliabilities assumed in a business combination aremeasured initially at their fair value on the dateof acquisition.

viii) Leases

Leases where significant portion of riskand reward of ownership are retained bythe lessor, are classified as operating leasesand lease payments are recognised as anexpense on a straight line basis in Statementof Profit and Loss over the lease term.Finance leases that transfer substantially all of therisks and benefits incidental to ownership of theleased item,are capitalized at commencement ofthe lease at the fair value of the leased propertyor, if lower, at the present value of the minimumlease payments. Lease payments are apportionedbetween finance charges and a reduction in thelease liability so as to achieve a constant rateof interest on the remaining balance of liability.

Finance charges are recognised in finance cost in the statement of profit and loss.

ix) Impairment of assetsa) Non Financial Instrument

Intangible assets and property, plant andequipment are evaluated for recoverabilitywhenever events or changes in circumstancesindicate that their carrying amounts may notbe recoverable. For the purpose of impairmenttesting, the recoverable amount (i.e. the higherof the fair value less cost to sell and the valuein-use) is determined on an individual assetbasis unless the asset does not generatecash flows that are largely independent ofthose from other assets. In such cases, therecoverable amount is determined for the CashGenerating Unit to which the asset belongs.If such assets are considered to be impaired,the impairment to be recognized in theStatement of Profit and Loss is measured bythe amount by which the carrying value ofthe assets exceeds the estimated recoverableamount of the asset. An impairment loss isreversed in the statement of profit and loss ifthere has been a change in the estimates usedto determine the recoverable amount. Thecarrying amount of the asset is increased to itsrevised recoverable amount, provided that thisamount does not exceed the carrying amountthat would have been determined (net of anyaccumulated amortization or depreciation) hadno impairment loss been recognised for theasset in prior years.

b) Financial instrument

The Group assesses at each date of balance sheet whether a financial asset or a group of financialassets is impaired. Ind AS 109 requires expectedcredit losses to be measured through a lossallowance. The Company recognises lifetimeexpected losses for all contract assets and /or all trade receivables that do not constitutea financing transaction. For all other financialassets, expected credit losses are measured atan amount equal to the 12 months expectedcredit losses or at an amount equal to the lifetime expected credit losses if the credit risk onthe financial asset has increased significantlysince initial recognition.


159Mastek Limited

x) Employee Benefits

A. Long Term Employee Benefits

a) Defined Contribution Plan

The Group has defined contribution plansfor post employment benefits in the form ofprovident fund, employees’ state insurance,labour welfare fund and superannuationfund in India which are administered through Government of India and/or Life InsuranceCorporation of India (LIC). The Groupalso makes contributions towards definedcontribution plans in respect of its subsidiaries and branches in foreign jurisdictions, asapplicable. Under the defined contributionplans, the Group has no further obligationbeyond making the contributions. Suchcontributions are charged to the Statementof Profit and Loss as incurred.

b) Defined Benefit Plan

The Group has defined benefit plans forpost employment benefits in the formof gratuity for its employees in India.The gratuity scheme of the Companyis administered through Life InsuranceCorporation of India (LIC). Liability fordefined benefit plans is provided onthe basis of actuarial valuations, as atthe Balance Sheet date, carried out byan independent actuary. The actuarialvaluation method used by independentactuary for measuring the liability is theprojected unit credit method.

Actuarial gains or losses are recognized inother comprehensive income. Further, theprofit or loss does not include an expectedreturn on plan assets. Instead net interestrecognized in profit or loss is calculatedby applying the discount rate used tomeasure the defined benefit obligationto the net defined benefit liability orasset. The actual return on the planassets above or below the discount rateis recognized as part of re-measurementof net defined liability or assetthrough other comprehensive income.Remeasurements comprising of actuarialgains or losses and return on planassets (excluding amounts included in

net interest on the net defined benefit liability) are not reclassified to profit or loss in subsequent periods.

c) Other long-term employee benefits

The employees of the Group are alsoentitled for other long-term benefit inthe form of compensated absences as perthe policy of the Group. Employees areentitled to accumulate leave balance upto the upper limit as per the Company’spolicies which can be carried forwardperpetually. Leave encashment foremployees gets triggered on an annualbasis, if the accumulated leave balanceexceeds the upper limit of leave. Further,at the time of retirement, death whilein employment or on termination ofemployment leave encashment vestsequivalent to salary payable for numberof days of accumulated leave balance.Liability for such benefits is provided onthe basis of actuarial valuations, as atthe Balance Sheet date, carried out byan independent actuary. The actuarialvaluation method used by independentactuary for measuring the liability is theprojected unit credit method.

B. Short-term employee benefits

The undiscounted amount of short termemployee benefits expected to be paidin exchange for the services rendered byemployees is recognised in the year duringwhich the employee rendered the services.These benefits comprise compensated absences such as paid annual leave and performanceincentives.

a) Termination benefits

Termination benefits, in the nature ofvoluntary retirement benefits or thosearising from restructuring, are recognised inthe Statement of Profit and Loss when theGroup has a present obligation as a result ofpast event, when a reliable estimate can bemade of the amount of the obligation andit is probable that an outflow of resourcesembodying economic benefits will berequired to settle the obligations.




xi) Share Based Payment

The Group determines the compensation costbased on the fair value method in accordancewith Ind AS 102 share based payment. The Group grants options to its employees which will bevested in a graded manner and are to be exercised within a specified period. The compensation costis amortized on graded basis over the vestingperiod. The share based compensation expense isdetermined based on the Company’s estimate ofequity instruments that will eventually vest.

xii) Provisions & Contingent Liabilities

Provisions are recognised when the Group has apresent obligation as a result of past events, forwhich it is probable that an outflow of resourcesembodying economic benefits will be required tosettle the obligation, and a reliable estimate of theamount can be made. A disclosure for a contingent liability is made where there is a possible obligationthat arises from past events and the existence ofwhich will be confirmed only by the occurrence ornon occurrence of one or more uncertain futureevents not wholly within the control of the Groupor a present obligation that arises from the pastevents where it is either not probable that anoutflow of resources will be required to settle theobligation or a reliable estimate of the amountcannot be made. Provisions are reviewed regularlyand are adjusted where necessary to reflect thecurrent best estimates of the obligation. Where the Group expects a provision to be reimbursed, thereimbursement is recognized as a separate asset,only when such reimbursement is virtually certain.

xiii) Revenue Recognition

The Group derives revenue primarily frominformation technology services. The Grouprecognizes revenue when the significant termsof the arrangement are enforceable, serviceshave been delivered and the collectability isreasonably assured. The method for recognizingrevenues and costs depends on the nature of theservices rendered:

a) Time and materials contractsRevenues and costs relating to time andmaterials contracts are recognized as therelated services are rendered.

b) Fixed price contractRevenues from fixed-price contracts arerecognized using the “percentage-of-completion” method. Percentage ofcompletion is determined based on projectcosts incurred to date as a percentage oftotal estimated project costs required tocomplete the project. The cost expended(or input) method has been used tomeasure progress towards completion asthere is a direct relationship between inputand productivity.

If the Group does not have a sufficient basis to measure the progress of completion or to estimate the total contract revenues and costs, revenue is recognized only to the extent of contract cost incurred for which recoverability is probable.

Unbilled revenue represents cost and earning in excess of billing as at the end of the reporting period. “”Unearned revenue”” represents billing in excess of revenue recognized. Advance payment received from customer for which no services have been rendered are presented as ‘Unearned revenue.

c) Maintenance contract

Revenue from maintenance contracts isrecognized ratably over the period of thecontract.

When services are performed throughan indefinite number of repetitive actsover a specified period of time, revenueis recognized on a straight line basis overthe specified period or under some othermethod that better represents the stage ofcompletion.

Revenues are shown net of goods and service tax, sales tax, value added tax and applicable discounts and allowances.

d) Multiple element arrangements

The Company allocates the arrangementconsideration to separately identifiablecomponents based on the cost plusmargin method.


161Mastek Limited

xiv) Income Tax

Tax expense for the year comprises of currenttax and deferred tax. Current tax is measured bythe amount of tax expected to be paid to thetaxation authorities on the taxable profits afterconsidering tax allowances and exemptions andusing applicable tax rates and laws. Deferred taxis recognised on timing differences between theaccounting base and the taxable income for theyear and quantified using the tax rates and taxlaws enacted or substantively enacted as on theBalance Sheet date.

Deferred income tax is recognized using thebalance sheet approach. Deferred incometax assets and liabilities are recognized fordeductible and taxable temporary differencesarising between the tax base of assets andliabilities and their carrying amount in financialstatements, except when the deferred incometax arises from the initial recognition of goodwillor an asset or liability in a transaction that isnot a business combination and affects neitheraccounting nor taxable profits or loss at thetime of the transaction.

Deferred income tax asset is recognized to theextent that it is probable that taxable profitwill be available against which the deductibletemporary differences, and the carry forwardof unused tax credits and unused tax losses canbe utilized. Deferred Income tax liabilities arerecognized for all taxable temporary differences.Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there isconvincing evidence that the Company will paynormal income tax during the specified period.Such asset is reviewed at each balance sheetdate and the carrying amount of the MAT creditasset is written down to the extent there is nolonger convincing evidence to the effect that theCompany will pay normal income tax during thespecified period.

Current tax and deferred tax assets and liabilitiesare offset when there is a legally enforceableright to set off the recognised amount and thereis an intention to settle the asset and liability ona net basis.

xv) Other Income

Other income comprises interest income ondeposits, research and development credits,

dividend income and gains / (losses) on disposal of investments except investments fair value through OCI. Interest income is recognized using the effective interest method. Dividend income is recognized when the right to receive payment is established.

xvi) Finance income and expenses

Finance costs comprises interest cost onborrowings, gain or losses arising on re-measurement of financial assets at FVTPL, gains/(losses) on translation or settlement of foreigncurrency borrowings and changes in fair valueand gains/ (losses) on settlement of relatedderivative instruments. Borrowing costs that arenot directly attributable to a qualifying asset arerecognized in the statement of profit and lossusing the effective interest method.

xvii) Earnings per share

Basic earnings per share is calculated bydividing the net profit or loss for the periodattributable to equity Shareholders of theCompany by the weighted average number ofequity shares outstanding during the period.For the purpose of calculating diluted earningsper share, the net profit or loss for the periodattributable to equity Shareholders of theCompany and the weighted average number ofshares outstanding during the period, are adjusted for the effects of all dilutive potential equity shares.

xviii) Cash and cash equivalent

Cash and cash equivalents include cash in hand,demand deposits with banks and other shortterm highly liquid investments with originalmaturities of three months or less.

xix) Investment Property

Property that is held either for long term rentalyield or for capital appreciation or both, but notfor sale in ordinary course of the business,usein the production or supply of goods or servicesor for administrative purposes. Upon initialrecognition, an investment property is measuredat cost. Subsequent to initial recognition,investment property is measured at cost lessaccumulated depreciation and accumulatedimpairment,if any.

Any gain or loss on disposal of an investmentproperty is recognised in profit and loss




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Notes to the Consolidated Financial StatementsFor the year ended March 31, 2018(All amounts in ` Lakhs, unless otherwise stated)


NON-CURRENT ASSETS

4. FINANCIAL ASSETS

(a) Investments

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016(A) Investment property (at cost less accumulated depreciation)*

Gross blockOpening 2 2 389 Less: Transferred pursuant to a scheme of arrangement - - (387)Closing 2 2 2 Less : Accumulated depreciationOpening 2 2 149 Depreciation for the year - - - Less: Transferred pursuant to a scheme of arrangement - - (147)Closing 2 2 2 Net Block - - -

Aggregate amount of investment property - - - * Fair Value of the investment property as at March 31,2018 is

` 130 lakhs(B) Investment in equity instrument(FVOCI)

Investment in Majesco USA 16,637 16,881 20,356 5,044,875 Equity Shares of US $ 0.002 each, fully paid up

(C) Investment in share warrant at FVTPLInvestment in Cashless Technologies India Private Limited - 1 - Share warrants (March 31, 2018- 8,000,000,March 31, 2017 - 8,000,000, April 1, 2016 - NIL)

Total (A + B + C) 16,637 16,882 20,356

(b) Loans

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Unsecured,considered good

Secured deposits 201 176 102 201 176 102

(c) Other non-current financial assets

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Advances to employees - 1 1 Foreign exchange forward contract - 282 257

- 283 258

5. OTHER NON-CURRENT ASSETS

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Capital advances 47 31 72 Prepaid expenses 0 2 2 Other loans and advances

Other advances 39 39 58 86 72 132

165Mastek Limited


CURRENT ASSETS

6. FINANCIAL ASSETS

(a) Investments

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016(i) Investment in mutual funds Units Amount Units Amount Units AmountInvestment in mutual funds (quoted - FVTPL):Birla Sun Life Floating Rate Fund - Short TermPlan - Regular - Growth

- - 21,143 46 - -

Mahindra Liquid Fund - Regular - Growth - - 13,726 144 - -Indiabulls Liquid Fund - Growth - - 13,045 206 - -IDFC Cash Fund -Growth- Regular Plan - - 3,054 60 - -Baroda Pioneer Liquid Fund - Plan A - Growth - - 14,085 263 37,027 643Birla Sun Life Cash Plus Fund - Growth 1,50,457 419 - - 2,46,814 599ICICI Prudential Money Market Fund - Growth - - 90,678 204 71,787 150UTI-Fixed Income Interval Fund Quarterly Interval Plan II 9,54,827 202 - - - -HDFC FMP 92D FEBRUARY 2018(1) (7.40%) 5,00,000 50 - - - -IDFC Yearly Series Interval Fund - Regular -Series II - Growth (9%)

10,02,363 151 - - - -

Reliance Quarterly Interval Fund Series II 8,46,468 202 - - - -Total (A) 1,024 923 1,392

Investment in mutual funds (quoted - FVOCI):Kotak Floater Short Term Fund - Growth - - - - 8,064 200Franklin India TMA - Super IP - Growth - - - - 9,282 210Kotak Treasury Advantage Fund - Reg - Growth - - 19,46,216 507 17,64,200 426Sundaram Ultra Short Term - Reg - Growth - - - - 21,86,228 452ICICI Prudential Ultra Short Term Plan - Growth - - 14,59,579 243 29,88,941 458UTI Short Term Income Fund 26,77,937 566 17,21,850 343 - -Kotak Corporate Bond Fund Standard Growth (Regular Plan) 41,894 956 31,422 671 - -HDFC Cash Mgmt Fund - Treasury Advantage Ret Growth 23,96,953 877 - - - -IDFC Corporate Bond Fund Regular Plan Growth 79,00,114 939 58,90,210 658 - -IDFC Credit Opportunities Fund Regular Plan Growth 48,56,963 521 - - - -Kotak Low Duration Fund -Growth 45,658 969 32,312 641 - -Kotak Treasury Advantage Fund - Reg - Growth 20,17,768 561 - - - -Birla Sun Life Floating Rate Fund - Long Term Plan - Regular - Growth

1,22,776 261 1,22,776 244 - -

ICICI Prudential-Flexible Income Plan - Regular - Growth 5,73,138 1,910 6,16,067 1,918 - -HDFC Cash Management Fund - Treasury Advantage Ret Growth - - 41,62,273 1,430 - -Reliance Corporate Bond Fund - Growth Plan 7,25,674 102 - - - -UTI Treasury Advantage Fund Institutional Plan - Growth 1,03,699 2,484 1,03,699 2,324 - -Total (B) 10,146 8,979 1,746Total (A+B) 11,170 9,902 3,138ii) Investment in term deposit (unquoted):Term deposit with Housing Development Finance Corporation 600 600 -Total 600 600 -Grand Total 11,770 10,502 3,138

Aggregate market value of quoted investments 11,170 9,902 3,138Aggregate amount of unquoted investment 600 600 -




(b) Trade receivables

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Unsecured

Considered Good 13,514 8,509 9,713 Considered Doubtful 511 375 148 Less: Allowance for doubtful debts (511) (375) (148)

13,514 8,509 9,713

(c) Cash and bank balances

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Cash and cash equivalents

Cash on hand 1 4 4 Bank balances

In current accounts 3,482 2,368 2,749 Fixed deposits 5,290 2,400 3,970

8,773 4,772 6,723 Other bank balances

Fixed deposits - - 2,095 Unpaid dividend account* 29 25 39

29 25 2,134

*Other bank balance represents earmarked balance in respect of unpaid dividend.

(d) Loans

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Unsecured, Considered good

Security Deposit 44 12 24 44 12 24

(e) Other current financial assets

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Advances to employees 161 174 162 Interest accrued on fixed deposits 46 3 89 Margin money deposit 1 1 2 Unbilled revenue 6,270 4,820 3,227 Reimbursable expenses receivable 79 96 266 Foreign exchange forward contract - 1,668 841 R&D credit receivable 1,113 621 -

7,670 7,383 4,587

7. OTHER CURRENT ASSETS

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Surplus contribution to employee benefit plan - gratuity (Refer Note 23) - - 29 Prepaid expenses 404 433 203 Input tax credit receivable 439 318 1,008 Advances to suppliers 176 15 145 Prepaid Rent 18 28 - Interest accrued on income tax refunds - - 54

1,037 794 1,439

167Mastek Limited


8. EQUITY SHARE CAPITAL

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Authorised:40,000,000 (March 31, 2017: 40,000,000;April 1, 2016: 40,000,000) equity shares of ` 5/- each

2,000 2,000 2,000

2,000,000 (March 31, 2017: 2,000,000; April 1, 2016: 2,000,000) preference shares of ` 100/- each

2,000 2,000 2,000

4,000 4,000 4,000 Issued, subscribed and fully paid up :23,692,056 (March 31, 2017:23,377,533; April 1, 2016 : 22,997,274) equity shares of ` 5/- each fully paid

1,185 1,169 1,150

Total 1,185 1,169 1,150

(a) Reconciliation of the number of equity shares outstanding at the beginning and end of the year are asgiven below:

ParticularsMarch 31, 2018 March 31, 2017 April 1, 2016

No. of shares Amount No. of shares Amount No. of shares AmountEquity SharesBalance as at the beginning of the year 23,377,533 1,169 22,997,274 1,150 22,546,672 1,127 Add: Addition on account of exercise of employee stock option plans

314,523 16 380,259 19 450,602 23

Balance as at the end of the year 23,692,056 1,185 23,377,533 1,169 22,997,274 1,150

(b) Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value of ` 5/- per share. Each shareholder is eligible for onevote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in theensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholdersare eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion totheir shareholding.

(c) Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company

March 31, 2018 March 31, 2017 April 1, 2016Name of the shareholder No. of shares % of

holdingNo. of shares % of

holdingNo. of shares % of

holdingAshank Desai 3,099,552 13.1% 3,099,552 13.3% 3,099,552 13.5%Sudhakar Ram 1,588,680 6.7% 2,791,680 11.9% 2,791,680 12.1%Ketan Mehta 2,399,100 10.1% 2,519,100 10.8% 2,519,100 11.0%Fidelity Purita Trust Fidelity Low Priced * - 0.0% - 0.0% 1,275,000 5.5%Radhakrishnan Sundar 1,415,800 6.0% 1,445,800 6.2% 1,445,800 6.3%

* Shareholding as at March 31,2018 and March 31,2017 is reduced to less than 5%.

(d) Shares reserved for issue under options

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Number of shares to be issued under the employee stock option plans 2,324,638 2,327,292 2,739,627




(e) Shares bought back (during 5 years immediately preceding March 31, 2018)

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016 March 31, 2015 March 31, 2014Equity shares bought back - - - - 2,484,007

9. OTHER EQUITY

ParticularsAs at


a) Capital Reserve 21 21 21 Any profit or loss on purchase,sale,issue or cancellation of thecompany own equity instrument is transferred to capital reserve

b) Capital redemption reserve 1,539 1,539 1,539 Non-distributable reserve into which amounts are transferred followingthe redemption or purchase of a company's own shares.

c) Security Premium 1,772 1,381 1,081 Amount received (on issue of shares) in excess of the par valuehas been classified as securities premium

d) Employee stock options outstanding account 1,029 802 707 The share option outstanding account is used to record the value ofequity-settled share based payment transactions with employees. Theamounts recorded in this account are transferred to share premiumupon exercise of stock options by employees. In case of forfeiture,corresponding balance is transferred to general reserve.

e) General reserve 362 362 362 This represents appropriation of profit by the company

f) Excess tax benefits from exercise of share-based options 1,742 38 10 Future tax benefits expected to arise from difference in tax base andaccounting base as per tax laws for respective countries where group operates

g) Retained earnings 33,581 27,649 24,613 Retained earnings comprises of the prior year's undistributedearning after taxes

h) Foreign currency translation reserve (1,047) (4,550) - Exchange difference relating to the translation of the resultsand net assets of the Company’s foreign operations from theirfunctional currencies to the Company’s presentation currencyare recognized directly in other comprehensive income andaccumulated in the foreign currency translation reserve.

i) Equity instrument through other comprehensive income 14,567 16,993 17,377 Changes in the fair value of equity instruments is recognized inequity instruments through other comprehensive income (net oftaxes), and presented within equity

j) Other item of other comprehensive income 177 1,502 726 Other item of other comprehensive income consist of FVOCIfinancial assets and financial liabilities and remeasurement ofdefined benefit assets and liability

53,743 45,737 46,436

169Mastek Limited


9.1 Distributions made and proposed

The Board of Directors at its meeting held on April 20, 2017 had recommended a final dividend of 50% (` 2.5 per equity share of par value ` 5 each). The proposal was approved by shareholders at the Annual General Meeting held on June 22, 2017, this has resulted in a cash outflow of ` 585 lakhs, inclusive of dividend distribution tax. Also, the Board of Directors at its meeting held on October 26, 2017, had declared an interim dividend of 40% (` 2 per equity share of par value of ` 5 each) for the quarter ended September 30, 2017. Further, the Board of Directors at its meeting held on April 18, 2018 have recommended a final dividend of 80% (` 4 per equity share of par value ` 5 each) which is subject to approval of shareholders. If approved, this would result in a cash outflow of approximately ` 948 lakhs, exclusive of dividend distribution tax.

NON-CURRENT ASSETS

10. FINANCIAL LIABILITIES

(a) Borrowings

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016SecuredTerm loan from Axis bank UK Limited (Refer note (a) below) 4,888 6,485 - Long term maturities of finance lease obligations in respect of vehicles (Refer note (b) below)

- 23 18

Vehicle loans from financial institution (Refer note (c) below) 73 15 - 4,961 6,523 18

Nature of security Terms of repayment

a) (i) Secured by pledge of all assets of Digility Inc. (incl. shares ofTrans American Information Systems Inc. and membership Interest in Taistech LLC.) and shares of Digility Inc.

Payment in eight equal half yearly installment over a period of five years starting after the end of 18 months from the date of disbursement of loan i.e. June 2018 along with interest at 3 months LIBOR + 250 basis point.

(ii) Secured by mortgage of Pune property of Mastek Limited.

(iii) Secured by corporate guarantee of USD 12 million given bythe company.

b) Finance lease obligations are secured by hypothecation ofassets (Vehicles) underlying the leases.

Monthly payment of Equated Monthly Instalments beginning from the month subsequent to taking the lease along with interest.

c) Loans from financial institution are secured by hypothecationof assets (Vehicles) underlying the loans.

Monthly payment of Equated monthly instalments beginning from the month subsequent to taking the loan along with interest at 8.75%.

(b) Other non-current financial liabilities

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Security and other deposits 113 107 72 Contingent consideration payable on business acquisition 2,131 3,731 207 Foreign exchange forward contract 409 - -

2,653 3,838 279




11. PROVISIONS

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016 Provision for employee benefits

Provision for gratuity (Refer Note 23) 68 162 - Provision for leave encashment 570 779 525

Other Provision Provision for cost overrun on contracts 26 26 25

664 967 550

CURRENT LIABILITIES

12. FINANCIAL LIABILITIES

(a) Borrowings

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Unsecured:Loan from bank 391 2 -

391 2 -

Note:(a) Unsecured loans is repayable on demand.

(b) Trade payables

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Trade payables 1,889 1,989 949

1,889 1,989 949

(c) Other financial liabilities

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Current maturities vehicle loans from financial institution(Secured) (Refer Note 10 (c))

18 3 -

Current maturities of finance lease obligations in respect of vehicles (Refer Note 10 (b))

- 25 30

Current maturities of Term loan (Refer Note 10 (a)) 1,629 - - Unpaid dividends (Refer note (a) below) 29 25 39 Security and other deposits 3 5 0 Other payables

Employee benefits payable 1,900 1,443 1,431 Accrued expenses 3,446 2,694 2,444 Contingent consideration payable on business acquisition 3,567 2,115 310 Foreign exchange forward contract 337 - -

10,929 6,310 4,254

Note:(a) There is no amount due for payment to Investor Education and Protection Fund under Section 125 of the Companies Act, 2013 as

at March 31, 2018.

171Mastek Limited


13. OTHER CURRENT LIABILITIES

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Unearned revenue 803 994 1,745 Capital creditors 193 45 25 Deferred Rent 19 27 26 Statutory dues (including stamp duty, provident fund and tax deducted at source)

3,344 2,148 3,087

4,359 3,214 4,883

14. PROVISIONS

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Provision for employee benefits

Provision for employee benefits 474 328 600 474 328 600

15. REVENUE FROM OPERATIONS


March 31, 2018 March 31, 2017Information technology services 81,564 55,855 Other operating revenue

Reimbursement of expenses from customers 157 161 81,721 56,016

16. OTHER INCOME


March 31, 2018 March 31, 2017Interest income - On fixed deposits 44 120

- On Income tax refunds 72 121 - On others 36 11

Profit on sale of current investments 340 305 Rental income 253 256 Profit on sale of tangible assets, net - 4 Net gain on foreign currency transactions and translation 244 - Dividend Income from current investment 6 - Doubtful debts recovered 15 142 Others* 1,089 301

2,099 1,260

*This includes R&D credit for the year ended March 31, 2018, ` 1031 lakhs

17. EMPLOYEE BENEFITS EXPENSES


March 31, 2018 March 31, 2017Salaries, wages and performance incentives 43,670 28,895 Gratuity (Refer Note 23) 281 211 Contribution to provident and other funds 2,551 2,247 Employee stock compensation expenses 395 229 Staff welfare expense 1,197 742

48,094 32,325




18. FINANCE COSTS


March 31, 2018 March 31, 2017Interest on term loan 252 64 Interest on finance lease 5 11 Bank charges 16 182 Other finance charges* 313 120

586 377

*This includes interest on fair value of contingent consideration.

19. DEPRECIATION AND AMORTISATION EXPENSES


March 31, 2018 March 31, 2017Depreciation on tangible assets 879 887 Amortisation on intangible assets 997 655 Less: Reimbursement of common cost received from Majesco Limited and Majesco software and Solutions India Private Limited

- (49)

1,876 1,493

20. OTHER EXPENSES


March 31, 2018 March 31, 2017Recruitment and training expenses 393 286 Travelling and conveyance 3,086 2,141 Communication charges 283 240 Electricity 334 385 Consultancy and sub-contracting charges 13,935 10,584 Audit Fees (Refer note 39) 82 67 Rates and taxes 324 256 Repairs to buildings 350 430 Repairs : others 623 597 Insurance 236 96 Printing and stationery 61 58 Professional fees 1,543 1,727 Rent 876 428 Advertisement and publicity 468 311 Net loss on foreign currency transactions and translation - 196 Provision / (Reversal) for doubtful debts and loans and advances, net 88 136 Bad debt written off 16 10 Hire Charges 78 87 Provision for cost overrun on contracts, net - 1 Expenditure towards corporate social responsibility (CSR) activities (Refer Note 40) 91 130 Loss on sale of fixed asset, net 1 - Miscellaneous expenses 793 670

23,661 18,836

173Mastek Limited


21. EXCEPTIONAL ITEMS


March 31, 2018 March 31, 2017

Demerger expenses - 340

- 340

22. EARNINGS PER SHARE (EPS)


March 31, 2018 March 31, 2017

The components of basic and diluted earnings per share for total operations are as follows:

(a) Net income attributable to equity shareholders 6,996 3,241

(b) Weighted average number of outstanding equity shares

Considered for basic EPS 23,521,823 23,214,937

Add : Effect of dilutive potential equity shares arising from outstanding stock options 1,335,225 1,003,614

Considered for diluted EPS 24,857,048 24,218,551

(c) Earnings per share (net of taxes) in `

Basic 29.74 13.96

Diluted 28.14 13.38

(Face value per share ` 5/- each)

23. EMPLOYEE BENEFIT PLANS

Amount recognized in the statement of profit and loss in respect of gratuity cost (defined benefit plan) is as follows:


March 31, 2018 March 31, 2017

Gratuity Cost

Service cost 265 216

Net interest on net defined liability/(asset) 4 (5)

Past service cost 12 -

Net gratuity cost* 281 211

Actuarial (Gain) / Loss charged to Other Comprehensive Income

(375) (0)

Assumptions

Interest rate 7.75% - 8% 7.10% - 7.6%

Salary increase 10.0% 10.0%

The estimates of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

* This excludes 9 months expenditure incurred prior to the date of business combination in FY 16-17.




The following table sets out the status of gratuity plan.

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Obligation at the beginning of the year 2,017 1,765 3,662 Add: Balance transferred on account of acquisition - 89 - Service cost 266 216 259 Past service cost 12 - - Interest cost 148 140 174 Actuarial (gain)/loss- financial assumption (34) 87 - Actuarial (gain)/loss- experience (130) (99) (166)Liabilities assumed on acquisition/(settled on divestiture) - - (1,963)Actuarial (gain)/loss- Demographic assumptions (223) - - Benefits paid (151) (181) (201)Obligation at the end of the year 1,905 2,017 1,765 Change in plan assetsPlan assets at the beginning of the year, at fair value 1,855 1,794 3,784 Employer Contribution - 110 0 Actuarial gain/(loss) - - - Interest income on plan assets 145 146 206 Assets acquired on acquisition/(distributed on divestiture) - - (1,963)Remeasurement on plan assets less interest on plan assets (13) (12) (31)Benefits paid (150) (183) (202)Plan assets at the end of the year, at fair value 1,837 1,855 1,794

Historical information

ParticularsAs at

March 31, 2018 March 31, 2017 March 31, 2016 March 31, 2015 March 31, 2014Present value of defined benefit obligation

1,905 2,017 1,765 3,662 2,884

Fair value of plan assets 1,837 1,855 1,794 3,784 2,157 Liability /(Assets) recognized 68 162 (29) (122) 727

The experience adjustments, meaning difference between changes in plan assets and obligations expected on the basis of actuarial assumption and actual changes in those assets and obligations are as follows:

ParticularsAs at

March 31, 2018 March 31, 2017Experience adjustment on plan liabilities (388) (13)Experience adjustment on plan assets 13 12

Sensitivity analysisReasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

ParticularsAs at March 31, 2018 As at March 31, 2017

Increase Decrease Increase DecreaseDiscount Rate (50 bps) (58) 62 (107) 116 Salary Growth (50 bps) 59 (56) 112 (104)

The above sensitivity analysis are based on changes in assumptions while holding all other assumptions constant. In practice this is unlikely to occur and changes in some of the assumptions may be corelated.

175Mastek Limited


Maturity profile of defined benefit obligation:

ParticularsAs at

March 31, 2018 March 31, 20171 Year 266 135 2 Year 363 104 3 Year 229 33 4 Year 204 111 5 Year 188 113 6 Year 208 116 7 Year 158 155 8 Year 158 111 9 Year 155 124 10 Year and above 1,652 4,510

The Company has setup an income tax approved irrevocable trust fund to finance the plan liability. The trustees of the trust fund are responsible for the overall governance of the plan.

24. INCOME TAX

(a) Income tax expenses in the statement of profit and loss consists of:


March 31, 2018 March 31, 2017Current income taxIn respect of current year 2,725 378 Deferred taxIn respect of current year (118) 287 Income tax expenses recognised in the statement of profit or loss 2,607 665 Income tax expenses recognised in other comprehensives income: (704) 397

(b) Income tax expenses in the statement of profit and loss consists of:


March 31, 2018 March 31, 2017Profit before taxes 9,603 3,906 Enacted income tax rate in India 34.6% 34.6%Computed expected tax expense 3,323 1,352 Effect of:Income tax charge/write back for earlier years 299 (903)Impact on Deferred Tax due to change in income tax rate (India & US) 238 - Expenses that are not deductible in determining taxable profit 22 261 Differential tax rates changes of subsidiaries operation in other jurisdications (1,304) (44)Others 29 (1)Total income tax expenses recognised in the statement of profit and loss 2,607 665

(c) Deferred tax assets/ (liabilities) in relation to:

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Property, plant and equipment 711 803 884 Provision for doubtful debts 78 63 51 Others liabilities 161 306 447 Net gain on fair value of mutual funds (180) (129) (8)MAT Credit entitlement 2,291 2,374 2,437 Undistributed Profits of Subsidiaries (1,685) (1,850) (1,891)Cash flow hedges 217 (675) (380)Excess tax benefits from exercise of share-based options 1,742 38 10 Others 104 64 87 Total 3,439 994 1,637




25. RELATED PARTY DISCLOSURES

Key Management Personnel (KMP): Sudhakar Ram, Vice Chairman and Managing Director

John Owen, Group Chief Executive Officer (from November 1, 2016)

Abhishek Singh, Group Chief Financial Officer(from September 17, 2016)

Atul Kanagat, Non Executive Director

Ashank Desai, Non Executive Director

Keith Selwyn Bogg, Non Executive Director

Priti Rao, Non Executive Director

Srinivasan Sandilya, Non Executive Director

Jamshed Jussawalla,Chief Financial officer(up to September 16, 2016)

Dinesh Kalani, Company Secretary

Enterprise where KMP has control: Cashless Technologies India Private Limited (w.e.f. February 2, 2016)

Joint Venture Legal Practice Technologies Limited (up to December 6, 2016)

i) Transaction with key management personnel


March 31, 2018 March 31, 2017

Short Term employee benefit 694 312

Share based payment transactions 7 1

Director Sitting Fees 79 30

Director Commission Paid 25 16

Total compensation paid to key management personnel 805 359

ii) Transaction with Enterprise : Cashless Technologies India Private Limited


March 31, 2018 March 31, 2017

Income from Technology Services 25 402

Rental Income - 9

Share Warrant - 1

Other reimbursable expense recovered from - 4

iii) Closing Balances are given below: Cashless Technologies India Private Limited

ParticularsAs at


Trade Receivables - 1 -

Other Current assets - 0 -

Other current liabilities - 5 -

Share Warrant - 1 -

177Mastek Limited


26. SEGMENT REPORTING

The CEO of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108, Operating Segments. The CODM evaluates the Group’s performance and allocates resources based on an analysis of various performanceindicators by geographical information. Accordingly, segment information has been presented for geographical information.

The organisational and reporting structure of the Group is based on geographical concept. Geographies are the operating segments for which separate financial information is available and for which operating results are evaluated regularly by CODM in deciding how to allocate resources and in assessing performance. The Group’s primary reportable segments consist of three different geographies which are based on the risks and returns in different geographies and the location of the customers: North America Operations, UK Operations, and Others.

Income and direct expenses in relation to segments are categorized based on items that are individually identifiable to that segment, while the remainder of costs are apportioned on an appropriate basis. Certain income and expenses are not specifically allocable to individual segments as the underlying services are used interchangeably. The management therefore believes that it is not practical to provide segment disclosures relating to such expenses and accordingly such expenses are separately disclosed as “unallocated” and directly charged against total income.

CODM does not review assets and liabilities at reportable segments level hence segment disclosure relating to total assets and liabilities has not been provided. Geographical information on revenue and industry revenue information is collated based on individual customers invoices or in relation to which the revenue is otherwise recognized.


March 31, 2018 March 31, 2017Segment Revenue

UK 56,315 46,040 North America 23,715 7,078 Others 1,691 2,898 Total 81,721 56,016


March 31, 2018 March 31, 2017Segment Result

UK 8,112 4,871 North America 1,550 65 Others (503) 99 Total 9,159 5,035 Finance costs 586 377 Other unallocable expenditure net of unallocable income (1,030) 412 Profit before exceptional item and tax 9,603 4,246 Exceptional items - (340)Profit before tax 9,603 3,906

Revenues and expenses directly attributable to segments are reported under each reportable segment. All other costs i.e. corporate costs and support function costs, which are not directly attributable or allocable to segments have been disclosed as common unallocable charges, net. Similarly revenues and income not allocable to segments are disclosed as net of unallocable expenditure.

The accounting policies consistently used in the preparation of the consolidated financial statements are also applied to item of revenue and expenditure in individual segments.




27. ACQUISITION OF SHARES OF TRANS AMERICAN INFORMATION SYSTEMS INC AND TAISTECH LLC

During the financial year 2017, Digility Inc., a wholly owned step-down subsidiary of the company acquired 100% equity shares ofTrans American Information Systems Inc. (“TA USA”) and 100% membership interest of Taistech LLC (”TA LLC”) on December 22,2016 for a total consideration of ` 14,115, including a contingent consideration of ` 5,794, payable over a period of three yearslinked to certain financial targets. The fair value of the contingent consideration liability was established by applying a discount rateof 5.5% .The purchase price has been allocated, as set below to assets acquired and liabilities assumed in business combination.

Component Purchase price allocated

Property,plant and machinery 34

Net current assets 2,221

Intangible assets 3,118

Total 5,373

Goodwill 8,742

Total purchase price 14,115

The intangible assets are amortized over a period of one to fifteen years as per management’s estimate of its useful life, based on the life over which economic benefits are expected to be realized.

The undiscounted contingent consideration liability can range between ` 5,162 to ` 7,091.

28. ACQUISITION OF TRANS AMERICAN INFORMATION SYSTEMS PRIVATE LIMITED

During the previous year, Company has acquired 100% stake in Trans American Information Systems Private Limited a companyengaged in IT consulting and Software Services, for a fixed consideration of ` 1187. The difference between total considerationpaid till date and the value of net assets taken over as of date of acquisition of ` 607 is accounted as Goodwill on consolidationamounting to ` 581. This Goodwill on consolidation will be tested for impairment at each reporting period.

Trans American Information Systems Private Limited is a Company with deep routed capability in providing high skilled resources and end to end e-commerce services including strategy, creative design,implementation and managed services having presence in india and supporting US customer.

The fair value of purchase consideration of ` 1187.The purchase price has been allocated, as set below to assets acquired and liabilities assumed in business combination.

Component Purchase price allocated

Property,plant and machinery 56

Net current assets 551

Total 607

Goodwill 580

Total purchase price 1,187

The goodwill amounting to ̀ 581 comprises value of benefits of expected synergies, future revenue, future market developments, assembled workforce.

None of the goodwill arising on the acquisition is expected to be deductible for tax purposes.

179Mastek Limited


29. FINANCIAL INSTRUMENTS

The carrying value and fair value of financial instruments by categories as at March 31, 2018, March 31, 2017 and April 1, 2016is as follows:

ParticularsCarrying Value Fair Value

March 31, 2018 March 31, 2017 April 1, 2016 March 31, 2018 March 31, 2017 April 1, 2016Financial AssetsAmortised CostLoans 245 188 126 245 188 126 Trade receivables 13,514 8,509 9,713 13,514 8,509 9,713 Cash and cash equivalents 8,773 4,772 6,723 8,773 4,772 6,723 Other bank balances 29 25 39 29 25 39 Other assets 7,670 5,717 3,746 7,670 5,717 3,746 Investment in term deposit 600 600 2,095 600 600 2,095

FVOCIInvestment in MF (Quoted) 10,146 8,979 1,746 10,146 8,979 1,746 Derivative assets - 1,950 1,098 - 1,950 1,098 Investment in equity shares (Quoted)

16,637 16,882 20,356 16,637 16,882 20,356

FVTPLInvestment in liquid fund 1,024 923 1,392 1,024 923 1,392 Total Assets 58,638 48,545 47,034 58,638 48,545 47,034

Financial LiabilitiesAmortized CostBorrowings 6,999 6,553 48 6,999 6,553 48 Trade payables 1,889 1,989 949 1,889 1,989 949 Other liabilities 5,491 4,274 3,986 5,491 4,274 3,986

FVOCIDerivative liabilities 746 - - 746 - -

FVTPL -Contingent consideration 5,698 5,846 517 5,698 5,846 517 Total Liabilities 20,823 18,662 5,500 20,823 18,662 5,500

30. FAIR VALUE HIERARCHY

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.as prices) or indirectly (i.e. derived from prices).

Level 3 – Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value onrecurring basis as at March 31, 2018, March 31, 2017 and April 1, 2016.




Quantitative disclosures of fair value measurement hierarchy for financial instruments as at March 31, 2018:


Date of valuation Total Level 1 Level 2 Level 3Financial liabilities measuring at fair valueDerivative LiabilitiesForeign exchange forward contract March 31, 2018 746 - 746 -

FVTOCI financial assets designated at fair valueInvestment in Equity Instruments March 31, 2018 16,637 16,637 - - Investment in MF March 31, 2018 10,146 10,146 - -

FVTPL financial assets designated at fair value Investment in Liquid Fund March 31, 2018 1,024 1,024 - -

Financial liabilities designated at FVTPLContingent consideration March 31, 2018 5,698 - - 5,698

Quantitative disclosures of fair value measurement hierarchy for financial instruments as at March 31, 2017:


Date of valuation Total Level 1 Level 2 Level 3Financial assets measuring at fair valueDerivative AssetsForeign exchange forward contract March 31, 2017 1,950 - 1,950 -

FVTOCI financial assets designated at fair valueInvestment in Equity Instruments March 31, 2017 16,882 16,882 - - Investment in MF March 31, 2017 8,979 8,979 - -

FVTPL financial assets designated at fair value Investment in Liquid Fund March 31, 2017 923 923 - -

Financial liabilities designated at FVTPLContingent consideration March 31, 2017 5,846 - - 5,846

Quantitative disclosures of fair value measurement hierarchy for financial instruments as at April 01, 2016:


Date of valuation Total Level 1 Level 2 Level 3Financial assets measuring at fair valueDerivative AssetsForeign exchange forward contract April 1, 2016 1,098 - 1,098

FVTOCI financial assets designated at fair valueInvestment in Equity Instruments April 1, 2016 20,356 20,356 - - Investment in MF April 1, 2016 1,746 1,746 - -

FVTPL financial assets designated at fair value Investment in Liquid Fund April 1, 2016 1,392 1,392 - -

Financial liabilities designated at FVTPLContingent consideration April 1, 2016 517 - - 517

181Mastek Limited


Derivative financial instrument

The group’s risk management policy is to hedge substantial amount of forecast transactions under GBP. Hedge is broadly classifies as revenue hedge. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.


The Company, in accordance with its risk management policies and procedures laid down by MUK, enters into foreign currency forward contracts to hedge against foreign currency exposures relating to highly probable forecast transactions. All forward exchange contracts have been designated hedging instrument in cash flow hedge in accordance with Ind AS 109.

The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.

The following table presents the aggregate contracted principal amounts of the Group’s derivative contracts outstanding:

The following ‘’sell‘’ foreign exchange forward contracts are outstanding as at:

ParticularsAs at


Non Designated derivative instrument 22,792 15,150 15,061

Non Designated derivative instrument in GBP lakhs 240 154 139

No. of Contracts 205 86 53

Forward Contracts covers part of the exposure during the period April 2018 -January 2022

Mark-to-Market (gains) / lossesAs at


Opening balance of Mark-to-market gains receivable on outstanding derivative contracts

1,950 1,098 1,881

Less: Reclassified from Hedging reserve account to statement of profit and loss

(1,300) (1,894) (900)

Add: Changes in the fair value of derivative instrument recognised in OCI

(1,396) 2,746 305

Less: Transferred pursuant to a scheme of arrangement - - (188)

Closing balance of Mark-to-market gains receivable on outstanding derivative contracts

(746) 1,950 1,098

Disclosed under:

Other current financial assets - 1,668 841

Other non-current financial asset - 282 257

Other current financial liabilities (337) - -

Other non-current financial liabilities (409) - -

(746) 1,950 1,098

There were no ineffectiveness recognised in the Statement of profit and loss during the period.




31. FINANCIAL RISK MANAGEMENT

The Group’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Group’s primary focusis to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.The primary market risk to the Group is foreign exchange risk. The Group uses derivative financial instruments to mitigate foreignexchange related risk exposures. All derivative activities for risk management purposes are carried out by specialist teams that havethe appropriate skills, experience and supervision. It is the Group’s policy that no trading in derivative for speculative purposes maybe undertaken. The Board of Directors and audit committee reviews and agrees policies for managing each of these risks, which aresummarised below:

Business and Credit Risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractualobligations, and arises principally from the Group’s receivables from customers and investment securities. Credit risk arises fromcash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. Themaximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counter party creditrisk is to prevent losses in financial assets. The Group assesses the credit quality of the counterparties, taking into account theirfinancial position, past experience, analysis of historical bad debts, ageing of accounts receivable and other factors.

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics ofthe customer, including the default risk of the industry and country in which the customer operates, also has an influence oncredit risk assessment. Significant portion of Group receivable are in UK and US geography where Group’s historical experience interms of actual bad debt is minimal. Most of the Group’s doubtful debts pertains to the Indian public sector which is undergoingthrough restructuring and therefore, Group evaluate every receivable in the geography and create adequate provision afteranalyzing specific risk.

The following table gives details in respect of revenues generated from top customer and top 5 customers:


March 31, 2018 March 31, 2017Revenue from Top Customer 9,085 6,616 Revenue from Top 5 Customer 30,527 23,631

Investments

The Group limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Group does not expect any losses from non-performance by these counterparties, and does not have any significant concentration of exposures to specific industry sectors

Liquidity Risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they become due. The Group manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Also, the Group has unutilized credit limits with banks. The Group’s corporate treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management.

The Working Capital position of the Group is given below

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Cash and Cash Equivalent 8,773 4,772 6,723 Other bank balances 29 25 39 Investment in MF 11,170 9,902 3,138 Investment in Term Deposit 600 600 2,095

20,572 15,299 11,994

183Mastek Limited


The table below provides details regarding the contractual maturities of significant financial liabilities as at March 31, 2018, March 31, 2017 and April 1, 2016:

ParticularsAs at March 31, 2018

Less than 1 Year 1 Year and aboveBorrowings 2,038 4,961 Trade Payables 1,889 - Other Financial Liabilities 8,945 2,244 Derivative Financial Instruments 337 409


Less than 1 Year 1 Year and aboveBorrowings 30 6,523 Trade Payables 1,989 - Other Financial Liabilities 6,282 3,838

ParticularsAs at April 1, 2016

Less than 1 Year 1 Year and aboveBorrowings 30 18 Trade Payables 949 - Other Financial Liabilities 4,224 279

Foreign Currency Risk

The Group’s activities expose it to market risk. In order to minimise any adverse effects on the financial performance of the Group, derivative financial instruments, such as foreign exchange forward contracts are used to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.


The Company, in accordance with its risk management policies and procedures laid down by MUK, enters into foreign currency forward contracts to hedge against foreign currency exposures relating to highly probable forecast transactions. The Group does not enter into any derivative instruments for trading or speculative purposes. The counter party is generally a bank. These contracts are for a period between one day and three years.

The following table presents foreign currency risk from non- derivative financial instrument as of March 31, 2018 and March 31, 2017.


USD $ GBP £ INR `Financial Assets 124 397 44,655 Financial Liabilities 202 105 22,804 Net Assets/(Liabilities) 21,851





USD $ GBP £ INR `Financial Assets 66 379 34,924 Financial Liabilities 199 88 19,997 Net Assets/(Liabilities) 14,927


USD $ GBP £ INR `Financial Assets 1 415 39,714 Financial Liabilities - 92 8,801 Net Assets/(Liabilities) 30,913

As at March 31, 2018 and March 31, 2017, respectively, every 1% increase/decrease of the respective foreign currencies compared to functional currency of the Company would impact results by approximately ` 219, ` 149 and ` 309 respectively.

32. CAPITAL MANAGEMENT

The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustainfuture development of the business. The Group monitors the return on capital as well as the level of dividends on its equityshares. The Group’s objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Total Equity Attributable to the Equity Share Holders of Group 54,928 46,906 47,586 As percentage of total Capital 89% 88% 100%Current Borrowings 2,038 30 30 Non Current Borrowings 4,961 6,523 18 Total Borrowings 6,999 6,553 48 As a percentage of total Capital 11% 12% 0%Total Capital (Borrowings and Equity) 61,927 53,459 47,634

The Group is predominately equity financed which is evident from capital structure table. Further, the Group has always been a net cash Group with cash and bank balances along with current financial assets which is predominantly investment in liquid and short term mutual funds being far in excess of debt.

33. FIRST-TIME ADOPTION OF INDIAN ACCOUNTING STANDARD (IND AS)

The Group’s consolidated financial statements for the year ended March 31, 2018 are prepared in accordance with Ind ASnotified under the Companies (Indian Accounting Standards) Rules, 2015.

The adoption of Ind AS was carried out in accordance with Ind AS 101, using April 1, 2016 as the transition date. Ind AS 101requires that all Ind AS standards and interpretations that are effective for the Ind AS Consolidated Financial Statements for theyear ended March 31, 2018, be applied consistently and retrospectively for all fiscal years presented.

All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between thecarrying amounts of the assets and liabilities in the consolidated financial statements under both Ind AS and Indian GAAP as ofthe Transition Date have been recognized directly in equity at the Transition Date.

In preparing these consolidated financial statements, the Group has availed itself of certain exemptions and exceptions inaccordance with Ind AS 101 as explained below:

185Mastek Limited


(a) Exception from full retrospective application:

1. Estimates exception: Upon an assessment of the estimates made under previous GAAP, the management is of the opinionthat there was no need to revise such estimates under Ind AS, except where estimates were required by Ind ASs and notrequired by previous GAAP.

b) Exemption from retrospective application:

1. Share-based payment exemption: The Group has availed exemption available under Ind AS 101 on application of Ind AS102, “Share Based Payment”, to equity instruments that vested before the date of transition to Ind ASs.

2. Business combination exemption: The Group has applied the exemption as provided in Ind AS 101 from application of IndAS 103, Business Combinations” to business combinations made prior to April 1, 2016.

3. The cumulative translation differences for all the foreign operations are deemed to be zero on the date of transition and thegain or loss on a subsequent disposal of any foreign operation shall exclude translation differences that arose before dateof transition and shall include subsequent translation differences.

4. The Group has elected to continue with the carrying value of all its property, plant and equipment including asset held for saleas recognised in consolidated financial statements as at April 1, 2016 (transition date) to Ind AS measured as per the PreviousGAAP and use that as its deemed cost as at the transition date.

On transition to Ind AS, the Group has elected to continue with the carrying value of all of its intangible assets recognised asat April 1, 2016, measured as per the Previous GAAP, and use that carrying value as the deemed cost or such intangible assets.

5. Under Ind AS 109, at initial recognition of a financial asset, an entity may make an irrevocable election to presentsubsequent changes in the fair value of an investment in an equity instrument in other comprehensive income. Ind AS101 allows such designation of previously recognized financial assets, as Fair Value through Other Comprehensive Income(FVTOCI) on the basis of the facts and circumstances that existed at the date of transition to Ind AS. Accordingly, theGroup has designated its investments in equity instruments at fair value through other comprehensive income on thebasis of the facts and circumstances that existed at the date of transition to Ind AS.

6. The Group has designated various hedging relationships as cash flow hedges under the Previous GAAP. On date of transitionto Ind AS, the Group has assessed that all the designated hedging relationship qualifies for hedge accounting as per Ind AS109. Consequently, the Group continues to apply hedge accounting on and after the date of transition to Ind AS.

(c) Reconciliations:

The following reconciliations provide a quantification of the effect of significant differences arising from the transition fromIndian GAAP to Ind AS in accordance with Ind AS 101:equity as at April 1, 2016;equity as at March 31, 2017;total comprehensive income for the year ended March 31, 2017;

i) Equity reconciliation

Particulars NotesAs at

March 31, 2017 April 01, 2016Equity under previous GAAP 34,860 31,933 Fair Valuation of Mutual Funds 2(a) 372 24 Fair Valuation of Non Current Investment 2(b) 15,002 18,479 Adjustment on account of Business Combination 1 (732) (567)Taxes (2,634) (2,265)Others 38 (19)Equity as per Ind AS 46,906 47,586 Comprising:Paid up Equity Share Capital 1,169 1,150 Other Equity 45,737 46,436




ii) Total comprehensive income reconciliation

Particular NotesAs at

March 31, 2017Net Profit as per Previous GAAP 3,691 Business Combination 1 (267)Fair value of investment designated at FVTPL 2(a) 14 Employee Benefit Expenses 3 (123)Revenue recognition - multiple element accounting (88)Others 14 Net profit for the period as per IND AS 3,241 Other Comprehensive loss (4,157)Total Comprehensive loss (916)

Notes:

1. Business combination

“Under Ind AS, the acquiree’s identifiable assets, liabilities and contingent liabilities that meet the condition for recognitionare recognised at their fair values at the acquisition date. This has resulted in the recognition of intangible assets andconsequent amortisation of such intangible assets in the statement of profit and loss. Under previous GAAP, the assets andliabilities of the acquiree are recognised at their book values.

Further, under Ind AS, contingent consideration payable on business combination is recognised on the date of acquisitionat fair value and revalued subsequently on each reporting date for change in fair value, if any. While under previous GAAPit was accounted at cost as and when liability is probable.”

2. Fair valuation of investments:

a) Under Ind AS, financial assets and financial liabilities designated at fair value through profit and loss (FVTPL) arefair valued at each reporting date with changes in fair value recognized in the statement of profit and loss. Underprevious GAAP, they are measured at lower of cost or net realisable value. Some mutual fund and Liquid fundinvestments have been classified as FVTPL based on the business model of the group. Consequently, increase in fairvalue of such investments in quoted mutual funds has resulted in a gain.

b) Under Ind AS, financial assets designated at fair value through other comprehensive income (FVTOCI) are fair valuedat each reporting date with changes in fair value (net of deferred taxes) recognized directly in other comprehensiveincome. Under previous GAAP, they were measured at cost with provision for dimunition other than temporary.Investments in equity instruments have been classified as FVTOCI. Consequently, fair value of such equity instrumentsdesignated at FVTOCI has resulted in a gain in other comprehensive income.

3. Under previous GAAP, actuarial gains and losses were recognised in the statement profit and loss. Under Ind AS, theactuarial gains and losses form part of remeasurement of the net defined benefit liability / asset which is recognised in othercomprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive incomeunder Ind AS instead of statement of profit and loss.

4. Under the Previous GAAP, the Group was not required to present other comprehensive income (OCI) separately. As per Ind AS 1,Presentation of Financial Statements, actuarial gain / loss on defined benefit liability, effective portion of cash flow hedges andcurrency translation reserve and gain/loss on other financial assets fair valued through OCI has been shown as a part of OCI.

5. The Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating,investingand financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended 31st March,2017 as compared with the previous GAAP.

187Mastek Limited


34. EMPLOYEE STOCK BASED COMPENSATION

i) Plan IV

The Shareholders of the Company through Postal Ballot on August 9, 2007 approved the allocation of 1,000,000 stock options to the eligible employees of the Company and its subsidiaries. The Company subsequently established a new scheme in 2007 for granting 1,000,000 stock options to the employees referred to above, each option representing one equity share of the Company. The vesting period of stock options will range from one year to four years from the date of grant. The stock options are exercisable within a period of seven years from the date of vesting.

ParticularsYear ended March 31, 2018 Year ended March 31, 2017


Weighted average Exercise price



Outstanding options,beginning of the year 147,927 99 276,117 105 Granted during the year 0 Exercised during the year (15,894) 116 (7,247) 113 Lapsed/Cancelled during the year (86,382) 97 (120,943) 113 Outstanding options,end of the year 45,651 97 147,927 99 Options exercisable,end of the year 45,651 97 147,927 99

ii) Plan V







Outstanding options,beginning of the year 62,225 68 143,825 65 Granted during the year - - - - Exercised during the year (10,000) 47 (79,100) 63 Lapsed/Cancelled during the year - - (2,500) 47 Cancelled revoked during the year 2,500 47 - - Outstanding options,end of the year 54,725 71 62,225 68 Options exercisable,end of the year 54,725 71 62,225 68

iii) Plan VI


ParticularsYear ended March 31, 2018 Year ended March 31, 2017No. of share

optionsWeighted average

Exercise priceNo. of share

optionsWeighted average

Exercise priceOutstanding options,beginning of the year 1,023,660 79 1,342,312 81 Granted during the year - - - - Exercised during the year (192,744) 62 (189,869) 48 Lapsed/Cancelled during the year (29,875) 175 (128,783) 139 Outstanding options,end of the year 801,041 80 1,023,660 79 Options exercisable,end of the year 649,506 66 590,631 60




(iv) Plan VII

The Company introduced a new scheme in 2013 for granting 2,500,000 stock options to its employees, employees of itssubsidiaries and its Independent Directors, each option giving a right to apply for one equity share of the Company on its vesting.The vesting period of stock option will range from one year to four years from the date of grant. The stock options are exercisablewithin a period of seven years from the date of vesting.






Outstanding options, beginning of the year 1,093,480 114 977,373 87

Granted during the year 665,825 218 320,000 169


Lapsed/cancelled during the year (240,199) 294 (99,850) 84

Outstanding options,end of the year 1,423,221 133 1,093,480 114

Options exercisable,end of the year 491,232 94 289,384 82

The following tables summarize information about the options/ shares outstanding under various programs as at March 31, 2018, March 31, 2017 and April 1, 2016 respectively:


No. of share options Weighted average remaining contractual life in years




Programme VI 801,041 5.2 80

Programme VII 1,423,221 7.4 133






Programme VI 1,023,660 6.4 79

Programme VII 1,093,480 7.7 114




Programme IV 276,117 3.5 105

Programme V 143,825 4.5 65

Programme VI 1,342,312 7.2 81

Programme VII 977,373 8.0 87

189Mastek Limited


The weighted average fair value of each unit under the plan, granted during the year ended was ` 257 using the Black-Scholes model with the following assumptions:

ParticularsAs at

March 31, 2018Weighted average grant date share price 349.8Weighted average exercise price 217.5Dividend yield % 1.7%Expected life 3-7Risk free interest rate 6.80%Volatility 67.80%

Volatility: Volatility is a measure of the amount by which a price hedge fluctuated or is expected to fluctuate during the period. The measure of volatility is used in Black Scholes oplion pricing model is the annualised standard deviation of the continuously compounded rates of return on the stock over a period of time. Company considered the daily historical volatility of Lhc Company’s stock price on NSE over the expected life of each vest.

Risk free rate: The risk free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on zero coupon yield curve for government securities.

Expected life the options: Expected life or the options is the period for which the Company expects the options to be live. The minimum life of stock options is the minimum period before which the options can’t be exercised and the maximum life of the option is the maximum period after which the options can’t be exercised. The Company have calculated expected life as the average of the minimum and the maximum life of the options.

Dividend yield: Expected dividend yield has been calculated as an total of interim and final dividend declared in last year preceding date of grant.

35. LEASES

1. Operating Lease

i) Lease payment

ParticularsAs at


Future minimum lease payment under non-cancellable operating lease (in respect of properties):


Due later than one year but not later than five years 1,322 1,229 60

Due later than five year - 302 -

Total Minimum lease payment 1,876 2,007 206

ii) Lease income

ParticularsAs at


Future minimum lease income under non-cancellable operating lease (in respect of properties):


Due later than one year but not later than five years 0 39 196

44 273 364




2. Finance Lease

ParticularsAs at

March 31, 2018 March 31, 2017 April 1, 2016Total minimum finance lease payment outstanding Due within one year - 30 36 Due later than one year but not later than five years - 26 20 Total minimum lease payments - 56 56 Less: interest not due - (8) (8)Present value of net minimum lease payments - 48 48

36. CAPITAL COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2018 is ` 130(March 31, 2017: ` 133 and April 1, 2016: ` 295)

37. CONTINGENT LIABILITIES

ParticularsAs at

March 31, 2018 March 31, 2017Claims against Company not acknowledged as debts(a) Sales tax matter 362 238 (b) Stamp duty matter - - (c) Income tax matter - 854

(i) The Company does not expect any cash outflows or any reimbursements in respect of the above contingent liabilities.

(ii) It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above, pendingoccurrence of the default event or resolution of respective proceedings.

38. MICRO, SMALL AND MEDIUM ENTERPRISES

Disclosure of payable to vendors as defined under the Micro, Small and Medium Enterprise Development Act, 2006” is basedon the information available with the Company regarding the status of registration of such vendors under the said Act, as perthe intimation received from them on requests made by the company. There are no overdue principal amounts / interest payableamounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliersduring the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect ofpayments made during the year or on balance brought forward from previous year.

39. PAYMENT TO THE AUDITOR


March 31, 2018 March 31, 2017Statutory Audit Fees 69 40Other Expenses 13 27

82 67

40. EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILITIES


March 31, 2018 March 31, 2017Amount required to be spent as per Section 135 of the Companies Act 84 97 Amount spent during the year 91 130

191Mastek Limited


41. DISCLOSURE MANDATED BY SCHEDULE III BY WAY OF ADDITIONAL INFORMATION

Name of Entity

As a % of consolidated net

assets

` in Lakhs As a % of consolidated

profit

` in Lakhs As a % of consolidated other

comprehensive income

` in Lakhs As a % of consolidated total

comprehensive income

Parent

Mastek Limited 12.1% 6,658 (180.3%) (12,616) 527.1% (1,311) (206.4%)

Subsidiaries

Indian


(5.0%) (2,770) (43.6%) (3,053) 5.8% (14) (45.5%)

Foreign

Mastek (UK) Limited 88.3% 48,497 281.0% 19,661 (398.3%) 991 306.1%

IndigoBlue Consulting Limited

(1.7%) (954) (17.5%) (1,225) (9.8%) 24 (17.8%)

Digility Inc. (3.4%) (1,851) (13.0%) (911) (14.4%) 36 (13.0%)

Taistech LLC 23.2% 12,750 181.2% 12,673 (6.2%) 15 188.1%


(13.5%) (7,403) (107.7%) (7,532) (4.1%) 10 (111.5%)






Place : Mumbai Place : Mumbai

Date : April 18, 2018 Date : April 18, 2018


193Mastek Limited


Shareholders and Investors are advised to go through the section on Management Discussion & Analysis and Investor information provided in the Report on Corporate Governance, as these and other parts of this Annual Report provide substantial information about the Company that you may find relevant and useful.

1. WHEN WAS MASTEK LTD INCORPORATED AND WHENDID IT HAVE ITS INITIAL PUBLIC OFFER?

Mastek Limited (“the Company”) was incorporated in thename and style of Management and Software TechnologyPrivate Limited on May 14, 1982. The first public offeringwas made in December 1992 at a price of ` 70/- (premium` 60/-) followed by another public issue in 1996 at a priceof ` 190/- (premium of ` 180/-).

2. HAS THE COMPANY ISSUED ANY BONUS SHARES INPAST? HAS THERE BEEN ANY STOCK SPLIT?

The Company issued bonus shares in the ratio of 1:1 inJanuary 2000 and in April 2006.

The Company’s shares were sub divided from ` 10/- to` 5/- in November 2000.

3. WHICH ARE THE STOCK EXCHANGES WHERE THECOMPANY’S SHARES ARE LISTED?

The Company’s shares are listed in India on National StockExchange of India Limited and BSE Limited. (NSE: MASTEK;BSE: 523704).

4. WHAT IS FACE VALUE OF THE COMPANY’S EQUITYSHARES AND WHAT IS THE SHARE CAPITAL OF THECOMPANY?

The face value of the Company’s equity share is ` 5/- pershare. The authorized share capital of the Company isdivided into 40,000,000 equity shares of ` 5/- each and2,000,000 preference shares of ` 100/- each. The issued,subscribed and paid share capital of the Company as on 31March, 2018 is ` 1,185 lakhs and comprises of fully paid23,692,056 equity shares of ` 5/- each.

5. WHAT ARE THE NAMES OF THE SUBSIDIARIES OF THECOMPANY AND WHERE ARE THEY LOCATED?

The Company has the following subsidiaries located in India, United Kingdom (UK) & United States of America (U.S.A.):

• Trans American Information Systems Private Limited - India (Wholly Owned Subsidiary of Mastek Limited)

• Mastek (UK) Limited – United Kingdom. (WhollyOwned Subsidiary of Mastek Limited)

• IndigoBlue Consulting Ltd - United Kingdom(Wholly Owned Subsidiary of Mastek (UK) Limited)

• Digility Inc – U.S.A. (Wholly Owned Subsidiary ofMastek (UK) Limited)

• TAISTech LLC, U.S.A. - (Wholly Owned Subsidiary ofDigility Inc., U.S.A.)

• Trans American Information Systems Inc. – U.S.A- (Wholly Owned Subsidiary of Digility Inc., U.S.A.)

6. WHAT IS THE COMPANY’S AREA OF OPERATION?

Mastek is a publicly held (NSE: MASTEK; BSE: 523704)leading IT player with global operations providing enterprisesolutions to government and enterprise organizationsworldwide. With its principal offshore delivery facility basedat Mumbai, India, Mastek operates in the UK, USA and Indianmarket regions. The Company has been at the forefront oftechnology and has made significant investments in creatingintellectual property, which along with proven methodologies and processes, increase IT value generation to its customersthrough onsite and offshore deliveries.

7. WHAT IS THE EMPLOYEE STRENGTH OF THE GROUP?

As on March 31, 2018, the Group had 2,058 employees

8. HOW MANY SOFTWARE DEVELOPMENT CENTRESDOES THE COMPANY HAVE?

The Company has seven development centers out of whichtwo are located in and around Mumbai, two in Chennaiand one each in Noida, Gurgaon and Pune.

9. WHERE ARE THE MARKETING OFFICES SITUATED?

The Company has Marketing offices in : UK, U.S.A andin India.

10. WHAT IS THE FISCAL YEAR OF THE COMPANY?

The Fiscal Year of the Company is April 01-March 31 everyyear. The Fiscal Year of the Company was changed from July 01-June 30 to April 01-March 31 from April 2013 onwardsafter enactment of the Companies Act, 2013.

11. WHERE IS THE REGISTERED OFFICE AND CORPORATEOFFICE OF THE COMPANY LOCATED?

The mailing address of the Company is:

Registered Office:

804 / 805, President House, Opposite C N Vidyalaya,

Near Ambawadi Circle,Ahmedabad-380006, Gujarat

Phone: +91-79-2656-4337; Fax: +91-22-6695-1331;

E mail: [email protected]

Website: www.mastek.com

Frequently Asked Questions (FAQs)


Corporate Office:Mastek Limited, 106/107, SDF IV, Seepz, Andheri (East), Mumbai - 400 096Tel: +91-22-6722-4200; Fax: +91-22-6695-1331E-mail: [email protected]

12. WHAT IS THE CREDIT RATING OF THE COMPANY?

The Company enjoys a good reputation for its sound financial management and the ability to meet its financial obligations.During the period under review, ICRA Limited, a reputed Rating Agency, had reaffirmed the ratings assigned for the bank facilitiesas [ICRA]A+ (Stable) rating for fund based limits and [ICRA]A1+ for non-fund based limits for the Working Capital facilitiesgranted to the Company by its Bankers.

13. WHAT ARE THE FINANCIAL HIGHLIGHTS OF THE COMPANY’S PERFORMANCE THIS YEAR ON ADOPTION OF INDIANACCOUNTING STANDARDS (“IND AS”)?

PARTICULARS CONSOLIDATED` in Lakhs

STANDALONE` in Lakhs

Year Ended March 31, 2018




Revenue from operations 81,721 56,016 16,232 16,948 Profit after tax 6,996 3,241 1,574 2,312

14. WHO ARE THE AUDITORS OF THE COMPANY?

M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No. 001076N/N500013), are the StatutoryAuditors of the Company since 35th Annual General Meeting (“AGM”) of the Company for a period of Five years, commencingfrom the conclusion of 35th AGM till the conclusion of the 40th AGM.

Earlier, M/s. Price Waterhouse Chartered Accountants LLP, was the statutory auditors of the Company for many years till 35th AGM and got retire at the conclusion of the 35th AGM due to the rotational requirements prescribed under the Companies Act, 2013.

15. WHAT IS THE PAST YEARS’ DIVIDEND TRACK RECORD OF THE COMPANY SINCE FISCAL YEAR 2001?

Fiscal Year (Face Value of ` 5/- each)

Share Outstanding (in Millions)

Dividend (per share)

Total Dividend(` in Lakhs)

2001 13.88 2.00 27.772002 13.97 3.00 419.072003 14.11 3.00 423.422004 13.88 3.00 416.402005 13.87 7.50 1036.112006 28.14 6.50 1403.122007 28.46 7.50 2132.342008 27.62 10.00 2557.702009 26.90 10.00 2679.342010 26.94 3.25 876.302011 26.95 - -2012 27.02 - -2013 24.64 3.00 739.152014 22.16 4.50 1040.592015 22.55 2.50 563.942016 23.00 2.50 574.412017 23.38 3.50 817.412018* 23.60 6.00 1422.00

* Final Dividend of ` 4/- per shares (@80%) for financial year 2017-18 is proposed by the Board of Directors at its meeting heldon April 18, 2018 which is subject to the Shareholders’ approval at the ensuing 36th AGM.

195Mastek Limited


16. DOES THE COMPANY HAVE A DIVIDENDREINVESTMENT PROGRAM OR DIVIDEND STOCKPURCHASE PLAN?

The Company does not offer a dividend reinvestmentprogram or dividend stock program at present.

17. HOW DOES ONE GET THE ANNUAL REPORT ANDQUARTERLY RESULTS OF THE COMPANY?

The Annual Report as well as Quarterly Results alongwith Analysis, Press Release and Analyst Presentation areavailable on the Company’s website at https://www.mastek.com/financial-information

These are also available on the websites of BSE Limited (www.bseindia.com) and National Stock Exchange of India Limited (www.nseindia.com), where the shares of the Company are listed.

18. WHERE ONE CAN OBTAIN DETAILS ON THE COMPANY’S SHAREHOLDING?

The Shareholding Pattern can be obtained from the websiteof the Company at https://www.mastek.com/investor-information. These are also available on the websites of BSE

Limited (www.bseindia.com) and National Stock Exchange of India Limited (www.nseindia.com), where the shares of the Company are listed.

19. DOES THE COMPANY ORGANISE ANY INVESTOR/ANALYST MEETING?

Conference calls with the Investors/Analysts are heldimmediately after the announcement of quarterly resultsand the transcript of the said calls are displayed on theCompany’s website at https://www.mastek.com/financial-information.

Apart from the quarterly meeting, Investors/Analysts meeting are also held with senior officials of the Company and the disclosure of the said meetings are made with the stock exchanges and also updated on the website of the Company at https://www.mastek.com/investor-information.

20. WHEN WERE THE COMPANY’S LAST THREE AGMsHELD?

AGMs for the past three financial years were held on thefollowing dates and location.

Financial Year Date Time Location2016-17 June 22, 2017 11.00 A.M Ahmedabad Management Association, H.T. Parekh Hall, Ahmedabad- 3800152015-16 July 25, 2016 11.00 A.M Ahmedabad Management Association, H.T. Parekh Hall, Ahmedabad- 3800152014-15 August 17, 2015 11.00 A.M Ahmedabad Management Association, H.T. Parekh Hall, Ahmedabad- 380015

21. WHO IS THE REGISTRAR AND SHARE TRANSFERAGENT (RTA)?

The Registrar and Share Transfer Agent (RTA) of MastekLimited since April 2016 are:Karvy Computershare Private LimitedUnit: Mastek LimitedAddress: Karvy Selenium, Tower B, Plot No. 31-32,Gachibowli, Nanakramguda,Financial District, Hyderabad - 500032, Telangana.Phone: Tel.: +91-040-6716-2222; Fax: +91-040-2342-0814;Toll Free no.: 1800-345-4001E-mail: [email protected] Person: Ms. Sripriya Senthilkumar

22. HOW DOES ONE TRANSFER HIS/HER SHARES ORCHANGE THE ADDRESS WITH THE REGISTRAR &SHARE TRANSFER AGENT?

For the transfer of shares in physical form and notingyour change of address, you need to write to Company’sRegistrar & Share Transfer Agent, Karvy ComputersharePrivate Limited (mailing address given in section 21 above).

Transfer of shares in the electronic mode is effected through your Depository Participant only.

23. WHOM DOES ONE CONTACT IN CASE OF NON-RECEIPT OF DIVIDEND, LOSS OF SHARE CERTIFICATES, ETC?

You may contact Company’s Registrar & Share TransferAgent, Karvy Computershare Private Limited (mailingaddress given in section 21 above), who will adviseyou accordingly. You may also communicate with theCompany in the event of any unresolved issues via Emailat [email protected]

24. IS AUTOMATED CLEARING HOUSE (ACH) MODEFACILITY AVAILABLE FOR PAYMENT OF DIVIDEND?

The Company extends ACH mode facility to all itsshareholders. The dividend amount of shareholders availingACH mode facility is directly credited to their bank accounts.Shareholders holding shares in physical form may submit aMandate form to Karvy Computershare Private Limited (RTA)(mailing address given in section 21 above), for availing ACHmode facility. Those holding shares in demat form are advised to please update their Demat Account details with proper and correct Bank account details with their Depository Participant.

25. HOW DO I BUY COMPANY’S SHARES?

The Company’s shares can be purchased in India eitherthrough a stockbroker or through any financial institution


that provides brokerage services at the BSE or NSE. The Company does not offer a direct share purchase plan to outsider.

26. DOES THE COMPANY HAVE A QUIET PERIOD? WHENIS THAT?

Yes. The Company follows quiet periods i.e. TradingWindow Closure which is made every quarter prior to itsrelease of quarterly results. During the quiet period, theCompany or any of its officials will not discuss earningsexpectations with any external parties. The Intimation of the Trading Window Closure is made to Stock Exchanges everyquarter along with the Intimation of the Board Meeting. Asper Company’s Code of Conduct for Prevention of InsiderTrading, the Trading Window Closure of the Company forevery quarter starts from last day of any fiscal quarter andwill continue till the forty-eight hours after the disclosure ofsuch financial results/information to the Stock Exchanges.

27. HOW CAN THE SHARES BE DE-MATERIALIZED ANDWHO ARE THE DEPOSITORY PARTICIPANTS (DP)?

The Company’s shares are traded only in electronic formsince June 2000. Shares can be dematerialized by openingthe demat account with any of the Depository Participant(DP). DPs are some of the banks, brokers and institutions who have been registered with National Securities DepositoryLimited (NSDL) or Central Depository Services (India) Limited(CDSL). A comprehensive list of DPs is available at www.nsdl.com and www.cdslindia.com.

28. IF DIVIDEND WARRANT IS LOST / WAS NEVERRECEIVED / HAS EXPIRED. HOW DO I GET A FRESHDEMAND DRAFT RE-ISSUED?

Please write to the Company’s Registrar & Share TransferAgent, Karvy Computershare Private Limited (mailingaddress given in section 21 above) with details of folionumbers (in the case of physical holdings) or the DP ID andaccount number in the case of dematerialized holdings.After verification, they will arrange to issue a fresh DemandDraft from the Dividend Banker.

To avoid this problem in the future, you can use the ECS/ACH facility in which the dividend amount is automatically credited to the bank account of your choice. To avail of this facility, give your request to Karvy Computershare Private Limited in writing (mailing address given in section 21 above).

Also, you might consider dematerializing your holdings through a Depository Participant. This would not only eliminate the issues of storage and risk of loss of paper certificates but also ensure automatic crediting of dividends to your bank account in time.

29. WHERE CAN I FIND DETAILS OF THE DIVIDENDSUNCLAIMED FOR 7 CONSECUTIVE YEARS, THESHARES IN RESPECT OF WHICH ARE LIABLE TO BETRANSFERRED TO THE INVESTOR EDUCATION ANDPROTECTION FUND AUTHORITY (IEPF AUHTORITY)?

Pursuant to the provisions of Section 124 and 125 of theCompanies Act and the Investor Education and ProtectionFund Authority (Accounting, Audit, Transfer and Refund)Rules, 2016, and amendments made thereunder all theconcerned shares in respect of which dividend had not been claimed or remained unpaid for seven consecutive years ormore is required to be transferred by the Company in thename of Investor Education and Protection Fund Authority(“IEPF Authority”) in specified Demat Account

The web link to find out the Details of Equity Shares/ Dividends transferred to IEPF Authority is available on the website of the Company at https://www.mastek.com/investor-information

The Company had identified and initiated the share transfer process with Depositories as advised by the Company’s Registrar and Share Transfer Agent and transferred 48,285 shares in November, 2017 and 7,033 shares in January, 2018 (based on transfer to IEPF of Un-Paid Interim Dividend of year 2009-10 and Un-Paid Final Dividend of year 2009-10 in November 2017 and January, 2018 respectively) to Investor Education and Protection Fund Authority Demat Account to comply with the said Rules. The List of shareholders whose shares were transferred to IEPF Authority is available on the Company’s website at https://www.mastek.com/investor-information.

In case the shareholders have any queries on the subject matter and the Rules, they may contact the Company’s Share Transfer Agent, Karvy Computershare Private Limited (mailing address given in section 21 above). The Members / claimants whose shares, unclaimed dividend, etc. have been transferred to IEPF may claim the shares and unclaimed dividend or apply for refund by making an application to IEPF Authority in IEPF Form-5 (available on www.iepf.gov.in). The Member / claimant can file only one consolidated claim in a financial year as per the IEPF Rules. It is in the Members interest to claim any un-encashed dividends and for future, opt for Automated Clearing House (ACH) mode, so that dividends paid by the Company are directly credited to the investor’s account on time.

30. HOW DOES ONE INFORM THE COMPANY TO SEND THE ANNUAL REPORT, OR ANY OTHER CORRESPONDENCETO BE SENT IN ELECTRONIC FORM TO SAVE THE TIMEAND HAVE SPEEDY COMMUNICATION?

The PAN Update/E-Communication Registration formannexed elsewhere in this Annual Report can be sent to

197Mastek Limited


the Registrar and Share Transfer Agent of the Company, Karvy Computershare Private Limited (mailing address given in section 21 above). As a part of Green initiative by the Ministry of Corporate Affairs (MCA), now members can receive various communications and correspondence including Annual Report through electronic mode i.e. E-mail. In this connection, we request the Members tosupport the green initiative by registering their E-mail id’s inthe annexed format to receive various communications tobe sent by the Company, electronically to you.

1. Members holding the shares in physical form maysend the communication to the Registrar and ShareTransfer Agent of the Company, either physically or

through e-mail at: (a) [email protected] OR (b) [email protected]

2. Members holding the shares in demat form mayfurnish their E-mail id details to the respectiveDepository Participants in their prescribed formats.

The PAN Update/E-Communication Registration form should be signed by the sole/first named Member as per the specimen signature recorded with the Registrar and Share Transfer Agent of the Company. Even after registering the e-communication, members are entitled to receive such communications in physical form on request made by them.

****


NOTICE is hereby given that the 36th (Thirty Sixth) Annual General Meeting of MASTEK LIMITED (CIN: L74140GJI982PLC005215) will be held at 11.00 a.m on Thursday, July 19, 2018 at H.T. Parekh Auditorium, AMA Complex, ATIRA. Dr. Vikram Sarabhai Marg, Ahmedabad 380015, Gujarat, to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited FinancialStatements (including Audited Consolidated FinancialStatements) of the Company for the financial year endedMarch 31, 2018 and the Reports of the Board of Directorsand Auditors thereon.

2. To confirm the payment of Interim Dividend of ̀ 2/- per EquityShare and declare a Final Dividend of `4/- per Equity Share(Face Value of `5/- each) for the financial year 2017-18.

3. To appoint a Director in place of Mr. Ashank Desai(DIN: 00017767), a Non- Executive Director whoretires by rotation and being eligible, offers himself forre-appointment.

To consider and if thought fit, to pass with or withoutmodification(s), the following resolution as OrdinaryResolution:

“RESOLVED THAT pursuant to provisions of Section 152and other applicable provisions of the Companies Act, 2013, (including any statutory modification(s) or re- enactment(s)thereof, for the time being in force), the approval of themembers of the Company, be and is hereby accorded, forthe reappointment of Mr. Ashank Desai (DIN: 00017767) asDirector, liable to retire by rotation.”

4. Ratification of Appointment of Statutory Auditors

To consider and if thought fit, to pass with or withoutmodification(s), the following resolution as OrdinaryResolution:

“RESOLVED THAT pursuant to the provisions of Sections139, 142 and other applicable provisions, if any, of theCompanies Act, 2013 read with the Companies (Auditand Auditors) Rules, 2014 (including any statutorymodification(s) or re- enactment(s) thereof, for the timebeing in force), the Rules made thereunder as amendedfrom time to time and pursuant to the resolution of theMembers passed at the 35th Annual General Meeting(AGM), the appointment of M/s. Walker Chandiok & Co.LLP, Chartered Accountants (ICAI Firm Registration No.

001076N/N500013), as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of the 40th Annual General Meeting, to be held in year 2022, be and is hereby ratified on such remuneration in addition to taxes and out-of-pocket expenses, etc. as may be mutually agreed upon by the Board of Directors and the Auditors.

RESOLVED FURTHER THAT the Board of Directors of the Company (including its Committee thereof) and/or Company Secretary be and are hereby authorized to do all acts, file necessary forms with Registrar of Companies and take all such steps as may be considered necessary, proper or expedient to give effect to this Resolution.”

SPECIAL BUSINESS:

5. Payment of Profit related Commission to Non-Executive Directors including Independent Directors

To consider and if thought fit, to pass with or withoutmodification(s), the following resolution as a SpecialResolution:

“RESOLVED THAT pursuant to the provisions of Sections149(9), 197, 198 and other applicable provisions, if any,of the Companies Act, 2013 (the “Act”) and the rulesthereunder (including any statutory modification(s) or re-enactment thereof, for the time being in force), paymentof a profit related commission of a sum not exceeding inaggregate one percent per annum, of the net profits ofthe Company calculated in accordance with the provisionsof Section 198 of the Companies Act, 2013, be paid toand distributed amongst any or all of the Directors of theCompany, other than the Managing Director/ Whole-timeDirector(s) of the Company, but including the IndependentDirectors of the Company, for a period of five financial yearscommencing from April 01, 2018 to March 31, 2023, insuch amounts or proportions and in such manner and in allrespects as may be decided and determined by the Boardof Directors of the Company, and such payments shall bemade in respect of the profits of the Company for eachfinancial year.

RESOLVED FURTHER THAT the Board of Directors of theCompany (including Committee) and/or Company Secretary be and are hereby authorized to do all acts, file necessaryforms with Registrar of Companies and take all such stepsas may be necessary, proper or expedient to give effect tohis resolution including payment of such commission forthe five year period.”

Notice to Members

199Mastek Limited


6. Payment of Certain Benefits/Perquisites to Mr. Ashank Desai- Non-Executive Director

To consider and if thought fit, to pass with or withoutmodification(s), the following resolution as a SpecialResolution:

“RESOLVED THAT pursuant to Section 197 and all otherapplicable provisions if any, of the Companies Act, 2013(“the Act”) and rules made thereunder (including anystatutory modification(s) or re-enactment thereof, for thetime being in force), and subject to all such permissions,sanctions and approvals as may be necessary, approval ofthe Company be and is hereby accorded for the paymentof certain benefits/ perquisites as mentioned herein belowto Mr. Ashank Desai (00017767), Non-Executive Director ofthe Company, who is neither in Whole-time employmentnor a Executive Director of the Company over and abovethe sitting fees and eligible commission payable to him as aNon-Executive Director:

• residence telephone expenses (including InternetConnection) incurred by Mr. Desai for official purposes, mobile bills and credit card fees;

• payment of premium for Mediclaim and PersonalAccident (PA) policy covering Mr. Desai and his familyand further renewal thereof;

RESOLVED FURTHER THAT the monetary value of the above perquisites/ facilities, shall not exceed `15 Lacs per annum for a period of three (3) years effective from July 01, 2018 to June 30, 2021.

RESOLVED FURTHER THAT the Board of Directors of the Company and/or the Company Secretary of the Company, be and is hereby authorized to do all such acts, deeds, file necessary form with Registrar of Companies and things and execute all such documents, instruments and writings as may be required and to delegate all or any of its powers herein conferred to any Committee of Directors or Director(s) to give effect to the aforesaid resolution.”

NOTES:

1. A MEMBER ENTITLED TO VOTE AT THE MEETING ISENTITLED TO APPOINT A PROXY TO ATTEND ANDVOTE INSTEAD OF HIMSELF/HERSELF AND SUCH APROXY NEED NOT BE A MEMBER OF THE COMPANY.

Proxies, in order to be effective, must be deposited at the Registered Office of the Company not less than forty-eight hours before the commencement of the Meeting (on or before July 17, 2018, by 11.00 a.m. IST). A proxy form for the same is enclosed.

2. The respective Explanatory Statements, pursuant to Section102 of the Companies Act, 2013 in respect of SpecialBusiness under Item Nos. 5 and 6 of the accompanyingNotice are annexed hereto.

3. A person can act as a proxy on behalf of Members notexceeding fifty in number and holding in the aggregatenot more than ten percent of the total share capital ofthe Company carrying voting rights. A Member holdingmore than ten percent of the total share capital of theCompany carrying voting rights may appoint a singleperson as a proxy and such person shall not act as proxyfor any other Member.

4. During the period beginning 24 hours before the timefixed for commencement of the Annual General Meeting(“AGM”) and until the conclusion of the Meeting, amember would be entitled to inspect the proxies lodgedduring the business hours of the Company, provided thatnot less than three days of notice in writing is given to theCompany.

5. Corporate members intending to send their authorizedrepresentatives to attend the Meeting pursuant to Section113 of the Companies Act, 2013 are requested to sendto the Company, a certified copy of the relevant BoardResolution together with the specimen signature(s) of theirrepresentative(s) who are authorized to attend and vote ontheir behalf at the AGM.

6. Members, Proxies and Authorized Representativesare requested to bring to the AGM, the attendanceslips enclosed herewith, duly completed and signed,mentioning therein details of their DP ID and Client ID/Folio No., along with their copy of the Annual Report at thetime of attending the Meeting. Please note that AnnualReport copies shall not be available/distributed at theAGM Venue.

7. In case of joint holders attending the AGM, the joint holderwho is highest in the order of names will be entitled to voteat the AGM.

8. Relevant documents referred to in the accompanying Notice and in the Explanatory Statements are open for inspectionby the Members at the Company’s Registered Office on allworking days of the Company during business hours uptothe date of the AGM.

9. The Register of Directors and Key Managerial Personneland their shareholding, maintained under Section 170 ofthe Companies Act, 2013 (“the Act”), and the Registerof Contracts or Arrangements in which the directors areinterested, maintained under Section 189 of the Act, will beavailable for inspection by the members at the AGM.


10. BOOK CLOSURE AND DIVIDEND

The Register of Members and Share Transfer Books of theCompany shall remain closed from Friday, July 13, 2018to Thursday, July 19, 2018, both days’ inclusive, forascertaining the eligibility for payment of final dividend, ifdeclared, at the AGM.

The Board of Directors of the Company at its meeting held on April 18, 2018 has recommended a dividend of ` 4/- per equity share (@80%) (Face Value of ` 5/- each) as final dividend for the financial year 2017-18. Final dividend, if declared, at the Annual General Meeting, will be paid within 30 days to those members whose names appear on the register of members of the Company as of the end of the day on July 12, 2018. The dividend in respect of shares held in dematerialized form in the Depository System will be paid to the beneficial owner of the shares as on July 12, 2018, as per the list to be provided by the Depositories for this purpose.

11. The Securities and Exchange Board of India (SEBI)has mandated the submission of Permanent AccountNumber (PAN) by every participant in the securitiesmarket. Members holding shares in electronic formare, accordingly, requested to submit their PAN to theDepository Participants with whom they maintain theirdemat accounts. Members holding shares in physicalform should submit their PAN to the Company / Registrarand Share Transfer Agents of the Company.

12. Member whose shareholding is an electronic modeare requested to direct change of address notificationsand updates of bank account details to their respectiveDepository Participants. We urge the members to utilizethe Electronic Clearing System (ECS)/Automated ClearingHouse (ACH) mode for receiving dividends.

13. Members are requested to immediately notify any changein their address and E-mail IDs to the Registrar and ShareTransfer Agent of the Company at the following address:

Karvy Computershare Private Limited

(Unit- Mastek Limited)

Address: Karvy Selenium Tower-B,

Plot No. 31 & 32, Financial District, Nanakramguda,

Serilingampally Mandal, Hyderabad - 500 032, Telangana.

Phone: Tel: 91-40-6716-1500 Fax: +91-40-2331-1968

E-Mail: [email protected];

Toll free no.: 1800-345-4001.

14. UNCLAIMED DIVIDEND

Pursuant to the provisions of Section 124 of the CompaniesAct, 2013, the Company has transferred on the due dates,

the Unclaimed Final Dividend for the financial year 2009-10 to the Investor Education and Protection Fund (IEPF) established by the Central Government.

15. Members who have not yet en-cashed their Final Dividendsfrom financial year 2012-13 and thereafter are requestedto make their claims to the Company/Registrar and ShareTransfer Agent.

16. TRANSFER OF CONCERNED SHARES TO INVESTOREDUCATION AND PROTECTION FUND (IEPF) AUTHORITY

Pursuant to the provisions of Investor Education andProtection Fund Authority (Accounting, Audit, Transfer andRefund) Rules, 2016(‘The Rules’) notified by the Ministryof Corporate Affairs effective September 07, 2016 and asper the amendment made from time to time, all underlyingshares in respect of which dividend has not been paid orclaimed by the shareholders for seven consecutive yearsor more were required to be transferred to the DEMATAccount of the IEPF Authority. The Company had identifiedand initiated the share transfer process with Depositoriesand transferred 48,285 shares in November, 2017 and7,033 shares in January, 2018 (due to be transferred toIEPF based on Un-Paid Interim Dividend of year 2009-10and Un-Paid Final Dividend of year 2009-10 in November2017 and January, 2018 respectively) to Investor Educationand Protection Fund Authority Demat Account to complywith the said Rules. The List of shares transferred to IEPFAuthority is available on the Company’s website at https://www.mastek.com/investor-information.

In case the shareholders have any queries on the subjectmatter and the Rules, they may contact the Company’sRegistrar and Share Transfer Agent, Karvy ComputersharePrivate Limited. The Members / claimants whose shares,unclaimed dividend, etc. have been transferred to IEPF mayclaim the shares and unclaimed dividend or apply for refundby making an application to IEPF Authority in IEPF Form-5(available on www.iepf.gov.in). The Member / claimant canfile only one consolidated claim in a financial year as perthe IEPF Rules. It is in the Members interest to claim anyun-encashed dividends from IEPF and for future, to considerdematerialization of their shares and opt for AutomatedClearing House (ACH) mode, so that dividends paid by theCompany are credited to the investor’s account on time.

17. Members holding shares in their single name/PhysicalForm are advised to make a nomination in respect oftheir shareholding in the Company, whilst those Membersholding shares in demat mode should file their nominationwith their concerned Depository Participant.

18. Members are requested to join the Company in supportingthe Green Initiative taken by Ministry of Corporate Affairs(“MCA”) to effect electronic delivery of documents including

201Mastek Limited


Annual Report and other documents to the members at the e-mail address registered for the said purpose. We request the members to register their e-mail address with their Depository Participant or with Karvy Computershare Private Limited, Registrar and Share Transfer Agent of the Company, for sending various notices, Annual Report and other documents through Electronic Mode (form attached). Those members who have changed their e-mail Address are requested to register their new e-mail Address with Karvy Computershare Private Limited, Registrar and Share Transfer Agent of the Company in case the shares are held in physical form, and with the Depository Participant where shares are held in Demat mode.

19. Pursuant to SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015, the Company is requiredto maintain Bank details of its Members for the purposeof payment of Dividends, etc. Members are requested toregister/update their bank details with the Company in caseshares are held in physical form and with their DepositoryParticipants where shares are held in dematerializedmode to enable expeditious credit of the dividend intotheir respective Bank accounts electronically through theAutomated Clearing House (ACH) mode.

20. The Annual Report 2017-18, the Notice of the 36th AnnualGeneral Meeting, along with the Attendance slip, Proxyform and E-Voting particulars, are being send throughthe electronic mode to members whose Email addressesare registered with the Company/ Depository Participants,unless a member has requested for a physical copy of theAnnual Report. For members who have not registeredtheir Email addresses, physical copies are being send bythe permitted mode. Members may also note that AnnualReport for the financial year ended March 31, 2018including Notice of the 36th Annual General Meeting is alsoavailable on the Company’s website at www.mastek.com/financial information for their download.

21. PROCESS AND MANNER OF E-VOTING

Pursuant to Section 108 of the Companies Act, 2013, Rule20 of the Companies (Management and Administration)Rules, 2014, as amended and Regulation 44 of SEBI (ListingObligations and Disclosure Requirements) Regulations, 2015,the Company is pleased to provide the facility to Members toexercise their right to vote on the resolutions proposed to bepassed at the ensuing Annual General Meeting by electronicmeans. The Members, whose names appear in the Registerof Members / list of Beneficial Owners as on Thursday, July12, 2018, i.e. the date prior to the commencement of bookclosure, are entitled to vote on the Resolutions set forth inthis Notice. The members may cast their votes on electronicvoting system from place other than the venue of themeeting (remote e-voting). The remote e-voting period will

commence on Sunday, July 15, 2018 (9.00 a.m. IST) and will end on Wednesday, July 18, 2018 (5.00 p.m. IST). In addition, the facility for voting through electronic mode, an Ballot/Instapoll voting system shall also be made available at the AGM venue and the Members attending the AGM who have not cast their vote by remote e-voting shall be eligible to vote at the AGM venue. The Company has appointed Mr. Prashant S. Mehta, Practising Company Secretary, to act as the Scrutinizer, to scrutinize the entire e-voting process in a fair and transparent manner. The Members desiring to vote through remote e-voting are requested to refer to the detailed procedure given hereinafter.

PROCEDURE FOR REMOTE E-VOTING

I. The Company has entered into an arrangement with M/s.Karvy Computershare Private Limited for facilitating remotee-voting for AGM. The instructions for remote e-voting areas under:

(a) In case of Members receiving an e-mail from M/s.Karvy Computershare Private Limited:

i. Launch an internet browser and open https://evoting.karvy.com

ii. Enter the login credentials (i.e. User ID andpassword). The Event No.+Folio No. or DPID-Client ID will be your User ID. However, if you arealready registered with Karvy for e-voting, youcan use your existing User ID and password forcasting your vote.

iii. After entering the above details Click on - Login.

iv. Password change menu will appear. Change thePassword with a new Password of your choice.The new password shall comprise minimum 8characters with at least one upper case (A-Z),one lower case (a-z), one numeric (0-9) and aspecial character (@,#,$,etc.) The system will alsoprompt you to update your contact details likemobile number, email ID, etc. on first login. Youmay also enter a secret question and answer ofyour choice to retrieve your password in case youforget it. It is strongly recommended that you donot share your password with any other personand that you take utmost care to keep yourpassword confidential. You need to login againwith the new credentials.

v. On successful login, the system will prompt youto select the E-Voting Event.

vi. Select ‘EVENT’ of Mastek Limited and click on -Submit

vii. Now you are ready for e-voting as ‘Cast Vote’page opens.


viii. Cast your vote by selecting appropriate optionand click on ‘Submit’. Click on ‘OK’ whenprompted.

ix. Upon confirmation, the message ‘Vote castsuccessfully’ will be displayed.

x. Once you have confirmed your vote on theresolution, you cannot modify your vote.

xi. Institutional shareholders (i.e. other thanindividuals, HUF, NRI, etc.) are required to sendscanned copy (PDF Format) of the relevant BoardResolution/ Authority Letter, along with attestedspecimen signature of the duly authorisedsignatory(ies) who are authorised to vote, tothe Scrutinizer by an e-mail at [email protected]. They may also upload the same inthe e-voting module in their login. The scannedimage of the above mentioned documentsshould be in the naming format “CorporateName EVENT NO.”

(b) In case of Shareholders receiving physical copyof the Notice of AGM and Attendance Slip

(i) Initial Password is provided, as follows, at thebottom of the Attendance Slip.

EVEN

(E-Voting Event Number)

USER ID PASSWORD

3784

(ii) Please follow all steps from Sr. No. (i) to Sr. No. (x)mentioned above in clause (a), to cast vote.

II. In case of any queries, you may refer to the ‘FrequentlyAsked Questions’ (FAQs) and e-voting user manual’available in the downloads section of M/s. KarvyComputershare Private Limited’s e-voting website https://evoting.karvy.com

III. The voting rights of the members shall be in proportion tothe shares held by the members as on the July 12, 2018being the cut-off date. Members are eligible to cast voteelectronically only if they are holding shares as on that date.

IV. Members who have acquired shares after the despatch ofthe Annual Report and before the book closure may obtainthe user ID and Password by sending a request at [email protected] or [email protected].

However, if you are already registered with M/s. Karvy Computershare Private Limited for remote e-voting, then you can use your existing user ID and password for casting your vote. If you have forgotten your password,

you can reset your password by using “Forgot User Details/Password” option available on https://evoting.karvy.com or contact M/s. Karvy Computershare Private Limited at the following toll free no. 1800-345-4001.

V. A person, whose name is recorded in the register ofmembers or in the register of beneficial owners maintainedby the depositories as on the cut-off date only shall beentitled to avail the facility of remote e-voting as well asvoting at the AGM.

VI. The Chairman shall, at the AGM, at the end of discussionon the resolutions on which voting is to be held, allowvoting with the assistance of scrutinizer through the Ballot/Instapoll facility, for all those members who are present atthe AGM venue but have not cast their votes by availing theremote e-voting facility.

VII. The Scrutinizer shall after the conclusion of voting atthe AGM, will first count the votes cast at the meetingand thereafter unblock the votes cast through remotee-voting in the presence of at least two witnesses not inthe employment of the Company and shall make, notlater than two days from the conclusion of the AGM, aconsolidated scrutinizer’s report of the total votes castin favour or against, if any, and submit to the Chairman/Company Secretary or a person authorized by the Chairman in writing, who shall countersign the same and declare theresult of the voting forthwith.

VIII. The Results declared alongwith the report of the Scrutinizershall be placed on the website of the Company www.mastek.com and on the website of Karvy ComputersharePrivate Limited immediately after the declaration ofresult by the Chairman / Company Secretary or a personauthorized by Chairman in writing. The results shall alsobe immediately forwarded to Stock Exchanges where theshares of the Company are listed.

22. Member(s) can opt for only one mode of voting i.e. eitherthrough remote e-voting or Ballot/Instapoll voting at theAnnual General Meeting. In case a member has castedmultiple votes, then voting done by e-voting will betreated as valid.

23. The resolution shall be deemed to be passed on the date ofthe AGM, subject to receipt of sufficient votes through acompilation of Remote E-Voting and voting held at the AGM.

24. Additional information on Director recommended forre-appointment as required under Regulation 26 andRegulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard2 on General Meeting is as follows:

203Mastek Limited


Item No.3

Name of the Director Ashank DesaiDirector Identification Number (DIN) 00017767Date of Birth 16/05/1951Nationality IndianDate of Appointment 06-06-1982Qualification B.E. from Mumbai University, M. Tech from the Indian Institute of Technology,

Mumbai and Post Graduate Diploma in Business Management (PGDBM) from the IIM Ahmedabad

Expertise in specific functional areas Mr. Desai is Founder and former Chairman of Mastek and has vast experience in IT arena. Mr. Desai, a founding member of NASSCOM, was also the President of Asian-Oceanic Computing Industry Organization (ASOCIO). He is also expert in Brand Building, Strategy Guidance, Merger and Acquisitions, Alliance and Partnerships etc. His outstanding contributions have earned him many accolades.

Shareholding in Mastek 30,99,552 (13.08%)List of Directorships held in other Companies 1. NRB Bearings Limited

2. Trans American Information Systems Private Limited3. Gurukul Knowledge Foundation4. Indian Federation Against Software Theft5. National Association Of Software And Service Companies6. Mastek Foundation7. Santacruz Electronics Export Manufacturers Association8. PanIIT Alumni Reach for India (PARFI)

Memberships / Chairmanships of Committees across Public companies including Mastek Limited

Mastek LimitedMember:- Audit Committee,- Stakeholders’ Relationship Committee,- Nomination & Remuneration Committee,- Corporate Social Responsibility CommitteeChairman:Governance Committee

NRB Bearings LimitedMember:- Stakeholders’ Relationship Committee,- Corporate Social Responsibility Committee and

No of Board Meetings attended during the year 5 of 5Relationships between the Directors inter-se No such relationship exist between the Directors inter-se Remuneration Details Refer Corporate Governance Report

By Order of the Board of DirectorsFor Mastek Limited

Date: April 18, 2018 Dinesh KalaniPlace: Mumbai Company SecretaryReg. Office: 804/805, President House, Opp. C. N. Vidyalaya, Membership Number: FCS 3343Near Ambawadi Circle, Ambawadi, Ahmedabad - 380 006


ANNEXURE TO THE NOTICEEXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 IS GIVEN BELOW.

ITEM NO.5

Payment of Profit related Commission to Non-Executive Directors including Independent Directors

The Members at the 31st Annual General Meeting of the Company held on July 17, 2013 passed a Special Resolution under erstwhile Section 309 of the Companies Act, 1956, approving the payment of Commission to Non-Executive Directors of the Company, for a period of five financial years commencing from April 01, 2013 till March 31, 2018.

As members are aware, that the Companies Act, 2013, and dynamic business environment have placed more onerous responsibilities on the Non-Executive Directors (NED) and particularly the Independent Directors. This requires the Directors to play a more pro-active role along with greater involvement in Board’s decision making process. Considering the above and with a view to align the remuneration payable to Non-Executive Directors / Independent Directors with the industry standards, it is proposed to renew the profit related commission, of a sum not exceeding in aggregate one percent per annum, of the net profits of the Company calculated in accordance with the provisions of Section 198 of the Companies Act, 2013, payable to all Non-Executive / Independent Directors for a further period of five financial years commencing from April, 2018 to March 2023.

In line with the prevailing practice, the Board has adopted a compensation structure for Non-Executive Directors/ Independent Directors that is linked to the attendance at Board meetings, Membership/Chairmanship of Committee/s of the Board, overall responsibilities as a Director and other relevant factors including time spent on critical policy decisions and higher degree of engagement. Within the overall limit, Commission will be distributed amongst the Directors in accordance with the recommendation of Nomination and Remuneration Committee and directions given by the Board of Directors in respect of each financial year. The Commission will be in addition to the sitting fees payable to the Directors for attending the meetings of the Board or Committee thereof and reimbursement of expenses for participation in the Board and other meetings.

The Non-Executive Directors and the Independent Directors are deemed to be concerned or interested in passing of the resolution at Item No.5. Except the Non-Executive Directors and the Independent Directors, no other Director(s) or Key

Managerial Personnel of the Company or their relatives are in any way concerned or interested (financially or otherwise) in the resolution set out at Item No. 5 of the Notice.

The Board of Directors recommend the Special Resolution set out at Item No. 5 of the Notice, for approval of Members.

ITEM NO. 6

Payment of Certain Benefits / Perquisites to Mr. Ashank Desai - Non-Executive director:

Mr. Ashank Desai, one of the founder Director of the Company, being a Non-Executive Director, represents the Company at various industry and public forums, both domestic and international. In view of his long association and in-depth knowledge of the Company and the industry, the Company is immensely benefitted by his continuous interaction with Government/ Semi-Government organizations. He has been actively involved with industry forums such as NASSCOM, ASSOCHAM and CII. Mr. Desai is the Chairman of Corporate Governance Committee and Member of Audit Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee and Corporate Social Responsibility Committee of the Company.

Also, the Shareholders at the 33rd Annual General Meeting of the Company held on August 17, 2015 passed a Special Resolution under Section 197 and all other applicable provisions of the Companies Act, 2013, approving the payment of certain Benefits / Perquisites which can be paid to Mr. Ashank Desai not exceeding `15 Lacs per annum, for a period of three years commencing from July 01, 2015 till June 30, 2018.

Taking into consideration his long associations with the Company and his on-going contribution for the Company, the Board of Directors in their meeting held on April 18, 2018 had proposed to continue, based on the recommendation of Nomination and Remuneration Committee, to pay Mr. Ashank Desai as a Non-Executive Director, Benefits/ Perquisites such as:

• re-imbursementofresidencetelephoneexpenses(includingInternet Connection) incurred by Mr. Desai for officialpurposes, mobile bills and credit card fees;

• paymentofpremiumforMediclaimandPersonalAccident(PA) policy covering Mr. Desai and his family and furtherrenewal thereof;

For a further period of three (3) years from July 01, 2018 till June 30, 2021, over and above the payment of sitting fees and eligible commission, subject to the approval of the Shareholders at the 36th Annual General Meeting. The Monetary value for the said benefits/ perquisites shall not exceed `15 Lakhs per annum.

205Mastek Limited


During the preceding three year period, the amount of Benefits/ Perquisites Paid to Mr. Ashank Desai are as follows :-

Sr. No. Financial Year Amount in `

1 2017-18 61,965/-

2 2016-17 1,12,264/-

3 2015-16 1,34,499/-

Save and except Mr. Ashank Desai and his relatives no other Director(s) and Key Managerial Personnel of the Company or their relatives are in any way concerned or interested (financially or otherwise) in the resolution set out at Item No. 6 of the Notice.

The Board of Directors recommend the Special Resolution set out at Item No. 6 of the Notice, for approval of Members.

By Order of the Board of DirectorsFor Mastek Limited

Dinesh KalaniDate: April 18, 2018 Company SecretaryPlace: Mumbai Membership Number: FCS 3343Reg. Office: 804/805,President House,Opp. C. N. Vidyalaya, Near Ambawadi Circle, Ambawadi, Ahmedabad - 380 006


36TH ANNUAL GENERAL MEETING TO BE HELD ON THURSDAY, JULY 19, 2018

MAP SHOWING LOCATION OF THE VENUE OF ANNUAL GENERAL MEETING OF MASTEK LIMITED

Venue:

H.T. Parekh Auditorium, AMA Complex, ATIRA. Dr. Vikram Sarabhai Marg, Ahmedabad 380015, Gujarat

MASTEK LIMITEDRegd. Office: 804/805, President House, Opp. C. N. Vidyalaya, Near Ambawadi Circle, Ambawadi, Ahmedabad - 380 006;

CIN: L74140GJI982PLC005215; Website: www.mastek.com;Phone: +91-79-2656-4337; Fax: +91-22-6695 1331; E mail: [email protected]

PROXY FORM[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014]

Name of the member (s):

Registered Address:

E-mail id:

Folio/DP ID-Client ID

I / We being the members(s) holding …………………… shares of Mastek Limited hereby appoint:

1. Name:…………………………………………………………..............................................................................................................................

Address:………………………………………………....................................................................................................................................…..

E-mail id:…………………………………………………..............…....… Signature:………........................……..……………...…Or failing him;

2. Name:…………………………………………………………..............................................................................................................................

Address:……………………………………………….................................................................................................................................…….

E-mail id:………………………………………………….....................… Signature:………........................…………………......…Or failing him;

3. Name:………………………………………………………….................................................................................................................................

Address:………………………………………………...............................................................................................................................………..

E-mail id:………………………………………………….....................… Signature:………............……………………………….

as my / our Proxy to attend and vote for me / us and on my / our behalf at the 36th Annual General Meeting of the Company to be held on Thursday, July 19, 2018 at 11.00 a.m. at H.T. Parekh Auditorium, AMA Complex, ATIRA. Dr. Vikram Sarabhai Marg, Ahmedabad 380015, Gujarat and/or at any adjournment(s) thereof in respect of the resolutions as are indicated below:

Resolution No. Resolutions Vote/s givenOrdinary Business: For Against

1. To receive, consider and adopt Audited Standalone and Consolidated Financial Statements of the Company for the financial year ended March 31, 2018 together with reports of the Board of Directors and the Auditors’ thereon.

2. To confirm the payment of Interim Dividend of ` 2/- per Equity Share and declare a Final Dividend of ` 4/- per Equity Share (Face Value of ` 5/- each) for the financial year 2017-18.

3. Re-appoint a Director in place of Mr. Ashank Desai (DIN: 00017767), a Non- Executive Director who retires by rotation and being eligible, offers himself for reappointment.

4. To consider the ratification for appointment of M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No. 001076N/N500013), as Statutory Auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of the 40th Annual General Meeting, to be held in year 2022 and to fix their remuneration.Special Business: Special Resolution

5. To consider Payment of Profit related Commission to Non- Executive Directors including Independent Directors for a period of five financial years commencing from April 01, 2018 to March 31, 2023.

6. To consider Payment of Certain Benefits/Perquisites to Mr. Ashank Desai- Non-Executive Director for a period of three (3) years effective from July 01, 2018 to June 30, 2021.

Signed this…………………….. day of……………… 2018

Signature of shareholder…………..................................... Signature of Proxy Holder(s)……………………………….....

Notes:1. This form in order to be effective should be duly completed and deposited at the Registered Office of the company, not less than 48 hours

before the commencement of the meeting.2. For the Notes, resolutions and Explanatory Statement, please refer to the Notice of the 36th Annual General Meeting.3. It is optional to put number of votes in the appropriate column against the Resolutions indicated in the Box, so that the Proxy should vote

accordingly. If you leave the ‘For’ or ‘Against’ column blank against any or all Resolutions, your proxy will be entitled to vote in the manneras he/she thinks appropriate. Please note that the total number of votes given cannot exceed the number of shares held for each and everyresolution.

4. Please complete all details of member(s) in the above box before submission.

PAN UPDATE/E-COMMUNICATION REGISTRATION FORM[FOR PHYSICAL HOLDER OF SHARES/FOR SHAREHOLDERS NOT YET UPDATED

THEIR E-MAIL ID OR BANK ACCOUNT DETAILS WITH THE COMPANY]

To,KARVY COMPUTERSHARE PRIVATE LIMITED(Unit: MASTEK LIMITED)Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda,Hyderabad – 500 032Toll Free No.: 1800-345-4001Email : [email protected]

Folio No. / DP ID & Client ID

Name of the sole / first named Member

Name of joint holder(s)

Registered Address of Member

Permanent Account Number (PAN)

E Mail ID to be registered

Mobile No

Bank Account Details : (for electronic credit of unpaid dividends and all future dividends)

Name of the Bank

Name of the Branch

Account Number (as appearing in your cheque book)

Account Type (Saving / Current / Cash Credit) Saving Current Cash Credit

9 Digit MICR Number (as appearing on the MICR cheque issued by the bank) Please enclose a photocopy of a cheque for verification

11 Digit IFSC Code

Date: Signature of the Member:_____________________

Note: 1. Members holding shares in demat form are requested to fill up prescribed registration form with their Depository Participant (DP).

2. Members are requested to keep DP/Registrar & Share Transfer Agent/Company informed as and when there is any change in the email address.Unless the e-mail ID given above is changed by you by sending another communication in writing / e-mail, the Company will continue to sendthe documents to you on the above mentioned E-mail ID.

3. Members hereby authorize Company to send all the correspondence on the above mentioned e-mail id.

4. Please enclose a self-attested copy of PAN card of the shareholders, original cancelled cheque leaf, Bank pass book and address proof viz.,Aadhaar card as required for updating of the details along with this form.

Notes

Notes

India Offices

International Offices

MUMBAI Mastek Limited#106/107/122/122 CSDF IV, Seepz, Andheri (East),Mumbai - 400 096Tel: +91-22-6722-4200 Fax: +91-22-6695-1331

MUMBAI Mastek Limited# IT 5/6/7/8, SDF VII,Seepz, Andheri (East),Mumbai - 400 096Tel: +91-22-6722-4200 Fax: +91-22-6695-1334

MUMBAI Mastek Limited#183, SDF VI, Seepz,Andheri (East),Mumbai - 400 096Tel: +91-22-6722-4200 Fax: +91-22-6695-1332

NOIDATrans American Information Systems Private LimitedLogix Cyber Park, Tower C, 9th Floor, C- 28 & 29, Sector 62, Noida, Uttar Pradesh - 201 301

UKMastek (UK) LimitedPennant House2 Napier Court, Napier RoadReading, RG1 8BW, UKTel: +44-(0)-118-903-5700Fax: +44-(0)-118-903-5779

USADigility INC.15601 Dallas Parkway, Suite 250, Addison, TX 75001

NAVI MUMBAI Mastek LimitedA/7, Mastek Millennium CentreMillennium Business Park, Mahape, TTC, Off Thane Belapur RoadNavi Mumbai – 400 710Tel: +91-22-2778-1272/6791-4646Fax: +91-22-2778-1332

NAVI MUMBAI Mastek LimitedA/303 Sector 1Millennium Business Park, Mahape,Navi Mumbai - 400 710Tel: +91-22-6791-4545/4646Fax: +91-22-2778-1332

PUNEMastek LimitedB 1/201, Second Floor, THE CEREBRUM, Kumar Cerebrum IT Park, Mulik Nagar, IT Park Area, Kalyani Nagar, Pune - 411 014Tel: +91-20-6607-2000/2703-2015/16Fax: +91-20-6607-2003

GURGAONTrans American Information Systems Private Limited

Unit Nos. 101, 101A, 102A and 102B, IRIS Tech Park, First Floor, Sector 48, Sohna Road, Gurgaon - 122 001 Tel: +91-124-4231-653

UKMastek (UK) Limited4th Floor, 36 Park Row, LeedsLS1 5JLTel: +44-(0)-113-242-6015Fax: +44-(0)-113-242-4882

USATAISTech LLC15601 Dallas Parkway, Suite 250, Addison, TX 75001

AHMEDABADMastek Limited804/805, President House,Opp. C. N. Vidyalaya,Near Ambawadi Circle,Ahmedabad – 380 006Tel: +91-79-2656-4337

CHENNAIMastek LimitedMahindra World City, Plot No. TP – 5, 4th Avenue, Nathan Sub (PO), Chengalpattu, Tamil Nadu – 603 002Tel: +91-44-6747-4724

CHENNAITrans American Information Systems Private LimitedBlock-1, 4th Floor, No. 184-187, Anna Salai, Little Mount Chennai, Tamil Nadu - 600 015

UKIndigoblue Consulting LimitedOrmond House, 3 Duke of York St, London SW1Y 6JP, United KingdomTel: +44-20-7692-4832

USATrans American Information Systems Inc.860 Hebron Pkwy, Suite 701, Lewisville, TX 75057, USATel: 972-853-7122

MASTEK LIMITEDCIN: L74140GJ1982PLC005215

Corporate Office: #106, SDF IV, Seepz, Andheri (East), Mumbai - 400 096

Tel: +91-22-6722-4200 | Fax: +91-22-6695-1331

Documents

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